Needham & Company Maintains a 'Hold' on Walt Disney (DIS); ROIC Analysis and FY12 Outlook

August 31, 2012 8:29 AM EDT
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Needham & Company maintains a 'Hold' on Walt Disney (NYSE: DIS).

Analyst, Laura Martin, said, "There is typically an 80-90% statistical correlation between forward-year ROICs and valuations (share prices) in the media space. Most of Wall St closely follows the income statement, i.e., the numerator. In this quarterly report, we analyze the denominator - trends in assets intensity, capital allocation, working capital changes, TV and film investments, and free cash flow."

"We estimate that DIS’s ROIC will increase by approximately 60 basis points from 10.1% to 10.7% in FY12E. This is one of the lowest improvements in our coverage universe in FY12. DIS’s WACC should remain at about 8.7%, by our estimates."

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 $49.42 yesterday.

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