Disney Positioning Itself For A Digital Future
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.
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.
“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
|Jan 2017||Morgan Stanley||Upgrades||Equal-Weight||Overweight|
|Jan 2017||BMO Capital||Downgrades||Market Perform||Underperform|
|Jan 2017||Goldman Sachs||Upgrades||Neutral||Buy|
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