Walt Disney (DIS) Shares Take a Hit as Guggenheim Downgrades to Neutral on Slower Profit Climb
- S&P 500 ends lower as Fed hints at hawkish tightening timeline
- Tesla (TSLA) Tops Q4 EPS by 28c
- Fed maintains federal funds rate at 0 to 1/4 percent, reduces assets purchases by another $30 billion/month and sees ending them in March
- 'Living up to the Legend': Microsoft (MSFT) Stock Recovers Earlier Losses as Analysts Boost Price Targets Despite Azure Growth Slowdown
- Buy Any Further Significant Pullback in Equities - Goldman Sachs
Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.
Guggenheim analyst Michael Morris downgraded shares of Walt Disney (NYSE: DIS) to Neutral from Buy with a price target cut to $165.00 per share from $205.00.
The Neutral rating reflects Guggenheim’s “updated view of the pace of profit growth at the company’s direct-to-consumer and parks businesses, which is now below consensus through fiscal 2024.”
“While we believe the worst of the overall bear-case narrative is understood (digital growth challenges, parks trend volatility and cost inflation), we still see shares as close to fairly valued at 17x our 2023E EBITDA and 30x P/E, particularly ahead of what we expect will be downward consensus revisions,” the analyst said in a client note.
On a more positive note, the analyst sees a positive in the fact that Disney plans to increase the total 2022 programming spend by $ 8 billion. This is “under-appreciated in a consensus outlook that expects the DTC business to approach breakeven by fiscal 2023.”
“We do see positive business signs, including ahead of consensus F1Q22 Disney+ subscriber additions (our 10mm versus consensus 6.8mm) bolstered by Hulu + Live bundling. However, broader business pressure has us revisit our target 12-month valuation, now at $165 as detailed within,” Morris added.
Disney stock price is down 1.7% in pre-open Friday.
By Senad Karaahmetovic | firstname.lastname@example.org
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- RBC Cautious on Meta (FB), Snap (SNAP) and Alphabet (GOOGL) Into 4Q Earnings Following Ad Checks
- RWE AG (RWE:GR) (RWEOY) PT Raised to EUR52 at Goldman Sachs
- Rio Tinto Plc. (RIO:LN) (RIO) PT Lowered to GBP52.40 at Goldman Sachs
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Downgrades, Hot Downgrades
Related EntitiesHulu, Pre Market Movers, Guggenheim, Senad Karaahmetovic
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!