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Disney Positioning Itself For A Digital Future

Disney Positioning Itself For A Digital Future
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Walt Disney Co (NYSE: DIS) is positioning itself for the future, while supporting the current ecosystem, Brean Capital’s Alan Gould said in a report. He maintained a Hold rating on Disney, saying the company’s premium multiple would likely be “more modest” in the near term.

Taking Strides For A Digital Future

Disney has agreed to acquire a third of video streaming company BAMTech, which has nearly 7.5 million client OTT subscribers. “A $3 billion price tag appears to be a healthy valuation for the business, and there will be some near-term dilution, but if it helps position Disney for the digital future it clearly makes sense,” Gould mentioned.

Disney has the option to acquire a majority stake in BAMTech.

Related Link: Here's Why The BAMTech Acquisition Is An Important Step For Disney

Current Ecosystem

While positioning itself for the digital future, Disney is supporting the current multi-channel bundle. The company has inked an OTT deal with AT&T Inc. (NYSE: T), extended stacking rights to AT&T and Comcast Corporation (NASDAQ: CMCSA) to enhance their traditional video offering, Gould stated.

The $5.5 billion Shanghai theme park opened successfully in mid-June and Disney already has plans for the park's expansion.

Limited Upside

“Given the cord-cutting fears, which we believe are overdone but will not likely be resolved anytime soon, and the high bar in film earnings, we expect DIS' premium multiple will be more modest over the near term,” the analyst commented.

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Latest Ratings for DIS

Mar 2018Loop CapitalInitiates Coverage OnBuy
Feb 2018BMO CapitalMaintainsUnderperformUnderperform
Jan 2018Morgan StanleyMaintainsOverweightOverweight

View More Analyst Ratings for DIS
View the Latest Analyst Ratings

Posted-In: Alan Gould Brean CapitalAnalyst Color Reiteration Analyst Ratings Best of Benzinga


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