As the peak of earnings season continues, analysts are weighing in on the mobile game company Glu Mobile Inc. (NASDAQ:GLUU) and entertainment giant Walt Disney Co (NYSE:DIS), with neutral ratings.
Glu Mobile Inc.
Glu Mobile saw its shares tank 12% over trading on Friday, after the company reported third-quarter results, which were solidly ahead of estimates, but fourth-quarter guidance and a preliminary 2016 outlook reveal significant operational challenges.
Adding fuel to the fire, Canaccord analyst Michael Graham downgraded Glu Mobile shares from a Buy to a Neutral rating, while slashing the price target to $4.00 (from $9.00), which implies an upside of 24% from current levels.
Graham commented, “Q4 guidance was slashed significantly due to weaker performance of recent launches including DH16, and 2016 bookings are now expected to grow more modestly. Given the unchallenging valuation, takeout possibilities, and strong celebrity slate, we suspect there is limited downside for the stock. However, operational headwinds cause less confidence in forward estimates than before. While we are mostly optimistic on Glu’s long-term future, we believe a HOLD rating is more appropriate pending signs of renewed operating momentum.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Graham has a total average return of 11.4% and a 50.9% success rate. Graham has a -4.6% average return when recommending GLUU, and is ranked #226 out of 3827 analysts.
Walt Disney Co
In a research report issued today, BMO Capital analyst Daniel Salmon reiterated a Market Perform rating on shares of Walt Disney, with a price target of $110, after the company reported its fiscal fourth-quarter financial results after the markets closed on Thursday. The company reported quarterly earnings of $1.20 per share and revenue of $13.51 billion, just shy of expectations on the top line but ahead of predictions on the bottom line.
Salmon wrote, “Investors likely breathed a collective sigh of relief as Disney offered a consistent tone after Time Warner reduced guidance on Wednesday. However there was also no incrementally positive commentary around the themes that led us to downgrade to Market Perform from Outperform last quarter. Namely: 1) although Disney is exploring options for alternative methods to deliver its content to consumers, like launching the Disney Life SVOD product in the U.K. and signing on to Sony’s Playstation Vue skinny bundle, we believe many options like a direct-to-consumer product for ESPN remain long-term ones, partially due to contractual obligations with traditional distributors. Those challenges should continue to put pressure on ESPN subscribers in the near term; and 2) 2016 capex is expected to be $5.1B, above our prior $3.6B estimate which was raised from $3.2B last quarter.”
According to TipRanks.com, analyst Daniel Salmon has a total average return of 8.5% and a 69% success rate. Salmon has an 20.4% average return when recommending DIS, and is ranked #712 out of 3827 analysts.
Out of the 28 analysts polled by TipRanks, 16 rate Walt Disney Company stock a Buy, while 12 rate the stock a Hold. With a return potential of 2%, the stock’s consensus target price stands at $118.09.