Disney Analyst Roundup: Buy On Weakness

Walt Disney Co DIS reported earnings Thursday for its fourth quarter and modestly beat estimates.

The stock was down 3.35 percent Friday morning, trading at $89.01. Analysts agreed that any weakness would be a good opportunity to buy shares.

Below are analyst comments in response to Disney's earnings release along with current ratings and price targets.

Wunderlich - Hold, $88 price target

“Although shares of Hold-rated Walt Disney (DIS) were under some pressure after the market close following the FQ4 earnings release, we would use any weakness to accumulate shares for investors comfortable with the global macro position. We retain an $88 price target for F2015 but are still assessing the attractiveness of the shares under our S&P 500 linked valuation approach. We remain rabid fans of the studio, with a likely Street high $22B valuation, but are cautious on the cyclical aspects of the Parks and Cable Networks (ESPN) businesses. Recurring FQ4 EPS came in at 89 cents, in line with consensus, and below the 94 cent Guardians of the Galaxy-fueled studio result we had expected.”

Bank of America - Buy, $105 price target

“F4Q results were ahead of consensus adjusted EPS but a touch below our forecast, reflecting broad-based strength across nearly all divisions with notable upside (versus our estimates.) at Theme Parks and Broadcasting. All-in, Disney total revenue grew +7 percent Y/Y (vs. +8 percent est.) while EBIT grew +12 percent (vs. +15 percent est.). Accelerating Parks, improving cap. returns, an improving Studio outlook, solid Media Networks and better Interactive all offer neat-term upside, while Disney Shanghai and Marvel/Pixar/Lucas film releases and full retrans offer a solid FY15E/16E. Although DIS trades at a 16 percent premium to the market P/E, it offers cheaper growth and trades at a 41 percent discount on a PEG basis.”

Wells Fargo - Outperform, no price target

“We aren't surprised by the FQ4 print (which was fine), or the FY2015 ''guide.'' We like DIS - especially for FY2016 - but we didn't hide our hesitation heading into this particular print given high expectations, a premium valuation, and the fact that the Street (us included) tends to have a really tough time modeling more than a quarter or two out. Plus, we remind you that this is the call where we tend to get some sort of ''guidance'' for the next fiscal year (and usually this ''guidance'' results in lower numbers). Well, we have to say we were right to be cautious - while FQ4 numbers were in line, FY2015 ests are coming down - due to higher programming costs combined with an incremental $225MM headwind from both pension expense and FX...we've been waiting for a pullback to get more aggressive, and we might just have gotten it. Post today's call, we lower our FY2015 EPS to $4.32 from $4.54 and also introduce our FY2016 EPS of $5.56.”