Nomura Securities Remains Bullish on Disney (DIS) as 2Q Results Miss Expectations

Nomura Securities maintained a Buy rating and $115.00 price target on Walt Disney (NYSE: DIS) following the company's 2Q earnings report. Star Wars: The Force Awakens and Zootopia propelled 69% YoY growth in theatrical distribution revenue. However, revenue and operating income declined at Consumer Products and Interactive Media, well below too-aggressive Street estimates.

Analyst Anthony DiClemente commented, "Disney reported a modest miss relative to Street estimates, primarily on declines in the Consumer Products division, as the tough Frozen compare weighed more heavily on retail than on licensing growth; without the benefit from Star Wars Battlefront last quarter, the YoY comparison to Frozen became much tougher in F2Q16. On the media side, Cable Networks affiliate fee and OI guidance was reaffirmed, with recurring affiliate fee and ad growth in line with expectations. Our view is that Cable is stable, Studio continues produce profitable/strategically valuable IP, and the Shanghai Park opening could represent a step-function in Disney’s long-term Parks OI growth given the improved visibility in China. While we modestly lower estimates, our TP is unchanged at $115 given recent expansion in market and sector multiples."

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 $106.60 yesterday.

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