Market Overview

Analyst: Disney Could Trade Range-Bound After Q4 Report

Analyst: Disney Could Trade Range-Bound After Q4 Report

Walt Disney Co (NYSE: DIS) reported fiscal fourth quarter earnings last week, which included a key update on the pricing for the Mouse's streaming video platform, scheduled to enter the market in 2019.

The Analyst

Loop Capital Markets' David Miller maintains a Hold rating on Disney's stock with an unchanged $103 price target.

The Thesis

Disney delivered a "fairly ugly miss" in its media networks division, which contributed to the stock's more than 4 percent decline immediately following the earnings report, Miller said in a Wednesday note. But by the end of the following day's trading session, Disney's stock finished higher by 2 percent. The somewhat unusual reversal could be attributed to the company's commentary that it will price its new streaming video service substantially below that of Netflix, Inc. (NASDAQ: NFLX), Miller said. 

Disney doesn't plan on including advertising in its Disney-branded product, but will do so when streaming ESPN, the analyst said. This makes it "very clear" that Disney will take market share away from competing streaming products when it launches in 2019, he said. 

Assuming that Disney will "displace" Netflix or CBS Corporation (NYSE: CBS)'s "All Access" product is "a near-term overreaction," Miller said. 

Finally, Disney's stock appears to be fairly valued at $103 per share, and investors should expect the stock to remain range-bound for the time being, according to Loop. 

Price Action

Shares of Disney were trading up about 0.48 percent at the time of publication at $103.67 and are down 1 percent since the start of 2017.

Related Links:

Analyst: If Content Is King, Disney Is 'King Of Content'

Once Again, Parks Are The Happiest Places In Disney's Quarter

Photo by mydisneyadventures/Flickr. 

Latest Ratings for DIS

Nov 2019MaintainsBuy
Nov 2019Initiates Coverage OnOverweight
Nov 2019Initiates Coverage OnOverweight

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Posted-In: David Miller Disney Streaming ESPN Loop Capital MarketsAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga


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