Disney (DIS) Weakness Wasn't ESPN, Several Reasons To Be Bullish - Piper Jaffray
Piper Jaffray analyst, Stan Meyers, kept his Overweight rating on Disney (NYSE: DIS) as outperformance at the studio was offset by underperformance at A&E, the shutdown of Infinity, and the negative currency impact. No change to the $120 PT.
Revenues and operating income of $13.0B/$3.8B were below consensus of $13.2B/$3.9B. Studio segment revenue was up 22%, while operating income increased 27% yoy, driven largely by the Star Wars and Zootopia outperformance.
Cable Networks were down 2% in the quarter, driven by a shift of CFP bowl games into F1Q from F2Q. Affiliate revenues were up 3% in quarter in line with our estimate, as 6% growth in per sub fee was offset by 1% decline in subscribers.
Management was bullish on its upcoming film slate, excited about the opening of the Shanghai Disney Resort and optimistic on new distribution platforms. ESPN ad sales are pacing up 5%, while ABC's scatter pricing trending 20% above upfront levels.
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Shares of Walt Disney closed at $106.60 yesterday.