Market Overview

2017 Will Be A 'Reset Year' For Disney

2017 Will Be A 'Reset Year' For Disney

Alan Gould of Rosenblatt Securities initiated coverage of Walt Disney Co (NYSE: DIS) with a Neutral rating and $120 price target, calling 2017 a "reset year" for the company.

According to Gould, Disney's earnings managed to grow at a 15 percent compounded annual growth rate since Bob Iger took over as CEO in 2005. However, 2017 will see just "modest growth" due to ESPN's well-documented woes and expectations for earnings from Disney's films to be lower this year versus 2016's record. Also, the company's theme park margins are at historic highs and it is unclear if this will continue moving forward.

On the other hand, Gould did, however, note that Disney's upcoming movie slate is the strongest it has been in years and the parks segment benefits from year-over-year comparisons after last year's higher opening costs for the park in Shanghai.

Taking all of these factors into consideration, Gould is projecting Disney's earnings growth in 2017 to be just a high-single digit.

Beyond 2017

Looking beyond 2017, Gould believes it is "critical" for Disney to develop a direct-to-consumer relationship. Specifically, ESPN needs to implement a full OTT (over-the-top) system, which can be delivered directly to consumers 5–10 years from now.

Also, Disney's film profits in 2018 are expected to reach $2.9 billion, marking an improvement from 2016's record of $2.7 billion and the estimated $2.3 billion in 2017.

Finally, the analyst addressed one of the major concerns facing Disney's shareholders: the eventual retirement of Iger, which has been postponed through 2019. Investors shouldn't be worried, as Disney boasts a strong management team and it is assumed the next leader will be a "creative or digital person" or the company can also look outside and hire a "strong digital executive."

Related Links:

Netflix's Studio Margins Will Be Eliminated, Thanks To More Original Self-Produced Content

Disney: A Compilation Of Controversies And Catalysts

Latest Ratings for DIS

Jan 2020MaintainsBuy
Nov 2019MaintainsBuy
Nov 2019Initiates Coverage OnOverweight

View More Analyst Ratings for DIS
View the Latest Analyst Ratings

Posted-In: Analyst Color News Travel Analyst Ratings Movers Tech Media General Best of Benzinga


Related Articles (DIS)

View Comments and Join the Discussion!

Latest Ratings

TSCOPiper SandlerMaintains119.0
UNPBMO CapitalMaintains200.0
UNPArgus ResearchMaintains205.0
ISRGJP MorganMaintains665.0
EHTHRBC CapitalMaintains132.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at