Nomura analysts came out today with a few insights on entertainment giant Walt Disney Co (NYSE:DIS) and computing giant Microsoft Corporation (NASDAQ:MSFT). The analysts reflect on Walt Disney’s studio outlook, and Microsoft’s upcoming earnings release.
Walt Disney Co
Nomura analyst Anthony Diclemente reiterated a Buy rating on shares of Walt Disney, while reducing the price target to $115 (from $121), given “slightly lower 2017E EPS and market multiple compression”. The analyst maintained his constructive view on DIS given its unrivaled IP monetization potential across all segments.
Diclemente commented, “In F1Q16, Star Wars will provide an outsized benefit to the Studio Entertainment segment; though we increase our 1Q16 Studio outlook to account for the strong box office results, this raise is offset mostly by increased expenses at Parks and lower college football ratings at ESPN. We increase our FY16 EPS estimate to $5.60 to reflect Star Wars follow-through. However, we modestly lower our FY17 estimate to $6.22 from $6.27 to more properly account for NBA fee step-ups in fiscal 2017.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Anthony Diclemente has a yearly average return of 7.3% and a 55% success rate. Diclemente has a 17% average return when recommending DIS, and is ranked #298 out of 3585 analysts.
Out of the 30 analysts polled by TipRanks, 14 rate Walt Disney Company stock a Buy, 15 rate the stock a Hold and 1 recommends to Sell. With a return potential of 15%, the stock’s consensus target price stands at $114.36.
With Microsoft preparing to release second-quarter fiscal 2016 results after the close of the market on Thursday, January 28, Nomura analyst Frederick Grieb weighed in today with his prediction. The analyst reiterated a Buy rating on the stock with a price target of $65.
Grieb wrote, “We expect Microsoft to report a generally in-line quarter, as we expect minor upside in the commercial business to be balanced by slightly lighterthan-expected Windows OEM results. Our reseller survey suggested Microsoft came in 1.8% ahead of plan in the quarter and was also positive on the Office 365 model transition, with 76% of survey respondents indicating customers are adopting Office 365 at a faster pace than a year ago, while 24% said customers were adopting Office 365 at a similar pace versus a year ago.”
“We are positive on the stock as we believe the transition to Office 365 is trending ahead of plan, declines in the Windows business are likely to moderate, and we expect the company to continue to outperform on the operating expense side of the business,” the analyst concluded.
According to TipRanks.com, analyst Frederick Grieb has a yearly average return of 17% and a 48% success rate. Grieb has a 14% average return when recommending MSFT, and is ranked #254 out of 3585 analysts.
The overwhelmingly majority of experts still say Microsoft is a “buy.” The average forecast is for the stock to hit $58.75 in the coming months, according to data compiled by TipRanks,.