Soleil Securities Sees Long-Term Walt Disney (DIS) ESPN Unit Growth
May 19, 2010 2:46 PM
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Soleil Securities analyst Alan S. Gould reiterated their Buy rating for shares of Walt Disney Co (NYSE: DIS) but lowered their price target to $40 per share, down from the previous price target of $42.
Gould recently attended a small Walt Disney Co analyst meeting and said that after attending, he still believes that ESPN's affiliate fee growth rate will accelerate in the long-term.
The Soleil Securities analyst wrote, "we have lowered our price target to $40 from $42 as the overall market has come down and the earnings estimate for the S&P 500 has risen. Our price target assumes DIS will trade at a 30%-35% premium to the market based on our F2011 EPS estimate. DIS has historically traded at a 10% to 35% premium to the market as it has always been considered the blue chip name within the media industry. Approximately half of the value of DIS lies in the cable network division and it is imperative that cable performs well for DIS to achieve a premium multiple."
