Walt Disney (DIS) Star Wars Tailwind to Be Offset by Parks and EPSN - Nomura

Nomura Securities analyst Anthony DiClemente reiterated a Buy rating on Walt Disney (NYSE: DIS) but cut his price target to $115.00 (from $121.00). The analyst said the Star Wars benefit will be offset mostly by increased expenses at Parks and lower college football ratings at ESPN.

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. Given slightly lower 2017E EPS and market multiple compression, we lower our Target Price to $115 from $121. We maintain our constructive view on DIS given its unrivaled IP monetization potential across all segments. Our $115 TP is based on 20x (down from 21x given the recent sector/ market multiple compression). FY15E EPS at $5.15; FY16E EPS from $5.53 to $5.60."

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 $98.48 yesterday.

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