Market Overview

Pivotal's Wieser To Disney Shareholders: Let It Go

Pivotal's Wieser To Disney Shareholders: Let It Go

Walt Disney Co (NYSE: DIS) is stuck in a catch-22 situation where the proposed acquisition of Twenty-First Century Fox Inc (NASDAQ: FOXA) will reduce the value of Disney to shareholders, but failing to complete the transaction is a negative for the company, according to Pivotal Research Group. 

The Analyst

Pivotal Research Group's Brian Wieser downgraded Disney from Hold to Sell with an unchanged $93 price target.

The Thesis

Disney's stock appreciation over the past few weeks is "unwarranted" and implies it may have to pay a higher price to buy Fox's assets given the all-stock nature of the deal and a potential bidding war, Wieser said in the downgrade note.

The higher price tag on a potential deal would reduce the incremental value it should be able to generate from synergies associated with the purchase, the analyst said. But if Disney doesn't succeed in buying Fox's assets, it "would not get to realize any of the expected synergies," he said. 

While Disney is fine without Fox, investors "bought into the idea" that a greater direct-to-consumer focus that Fox would bring is a positive for the Mouse, Wieser said.

Investors would conclude that a failure by Disney to buy Fox's assets is a "subjectively negative" event, in Pivotal's view. 

Disney has few, if any, notable catalysts ahead that would justify the stock trading above Pivotal's $93 price target, so a downgrade is warranted, Wieser said.

Price Action

Disney shares were trading lower by 1.55 percent premarket Monday at $107.16. 

Related Links:

Can Comcast Beat Disney And Win Fox's Assets?

Big Tech's Move Into Streaming Live Sports: Winners And Losers

Latest Ratings for DIS

Aug 2019MaintainsIn-Line
Aug 2019UpgradesNeutralOutperform
Jun 2019DowngradesOutperformIn-Line

View More Analyst Ratings for DIS
View the Latest Analyst Ratings

Posted-In: Brian Wieser Fox Assets Pivotal Research GroupAnalyst Color Downgrades Price Target Analyst Ratings Media Best of Benzinga


Related Articles (DIS + FOXA)

View Comments and Join the Discussion!

Latest Ratings

FWONAFBN SecuritiesDowngrades
TRVBank of AmericaDowngrades
PSTGCross ResearchUpgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
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.
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

The Market In 5 Minutes: China, OPEC, Banks, Bitcoin And More

Rent-A-Center Board Approves Sale To Vintage Capital