Disney (DIS) ESPN Subscriber Count Lower than Expectations; Stifel Reiterates Buy

Stifel reiterated a Buy rating and $130.00 price target on Walt Disney (NYSE: DIS) after the company released its 10-K filing. ESPN subscriber count which was down 3.2% from a Nielsen perspective/tabulation. While the company has noted that paid subscriber trends have been more moderate than the Nielsen numbers, because of tiering protection, Stifel would expect that the paid subscriber count to be down in 2% range with cord cutting accounting for around 1.5% and another 50-100bp from tiering down packages.

Analyst Benjamin Mogil commented, "After market close on Wednesday, Disney (DIS, $118.67, Buy) released its 10-K filing. ESPN subscriber count was -3.2%, and while this is a Nielsen and not paid subscriber number it is likely somewhat weaker than expectations although we caution the difficulty of extrapolating from a Nielsen number to a paid one. The remaining key Disney domestic channels showed more moderate declines. We continue to see Media performance as the likely focal point of debate on this story, particularly given the limited ability for material cost relief at ESPN given the bulk of their structural costs are license fees, although we note that the company is far more diversified than many of its media peers (in terms of cable exposure) and heads into a very strong studio/CP slate. We remain Buy rated."

For an analyst ratings summary and ratings history on Walt Disney click here. For more ratings news on Walt Disney click here.

Shares of Walt Disney closed at $118.67 yesterday.

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