Nomura Analyst Explains Why Disney Is An 'Anti-Media Company'

Walt Disney Co DIS declared much better than expected fourth-quarter earnings today on back of roaring success of ‘Frozen’, which sent its stock soaring to an all time high of $101.94. The company reported EPS of $1.27, compared to $1.03 a share it reported in the same quarter last year.

Anthony DiClemente, analyst at Nomura, has a Buy rating on the stock. He was on CNBC recently to discuss why he likes Disney and why is the company different from other media companies.

“I think, one thing that Frozen has proven to the Street is that it’s not just a one hit wonder, these franchises have longevity, they have legs,” DiClemente said. “And Disney is different from other media companies in that they have an ability to create a franchise that has trajectory beyond just the first year of release.”

He continued, “So, when you think about the consumers product ramp up into Star Wars in December or 2 Pixar films which could be new franchises, they didn’t have any Pixar films last or like…Marvel. I think, it’s possible that Street estimates aren’t factoring in upside from those new franchises. So, we’ll see if the content cycle continues to bring them [incremental] tailwind.

Difference Between Disney And Other Media Companies

"The main theme here is that Disney is a lot different from other media companies where we are seeing some concern about the ad market," DiClemente said. "ESPN advertising was down in the quarter so was ABC’s advertising but Disney was able to crush numbers despite that. So, It’s almost like the anti-media company or you have got this bifurcation or decoupling of Disney versus the longer tail Cable TV, that’s really the narrative."