Last week Goldman Sachs upgraded the stock to a buy from a hold and raised its price target to $134. The next day, BMO Capital downgraded it to an underperform from market perform, and cut its price target to $88 a share.
Goldman stated that ESPN headwinds could subside in the near future. The key to Disney's stock, some say, is that the market already assumed that ESPN will keep losing subscribers at a rate of approximately 2 percent.
Thus, Goldman thinks the risk-reward is favorable, as the weakness is already baked into the stock.
Goldman also cited Disney's film slate for 2018 as being strong, followed by its theme parks. Additionally, Goldman also believes the company would benefit the most from Trump's proposed corporate tax cuts.
BMO Capital acknowledged the sentiment has been more positive to Disney, but said the positive turn came too early. BMO thinks the Nielsen's monthly cable subscriber numbers could be down this year, and warned to not get too excited about box office numbers for Disney's new films.
BMO also worried that Wall Street wants Disney to make a big acquisition. It also said not to get too excited about Disney's prospects in 2018 if long-time CEO Bob Iger will be stepping down in the middle of the year.
I'm in the Goldman Camp for now but I'm concerned about Iger stepping down in 2018 as a replacement that good will be hard to find. I'm still long DIS but where do you stand?
Submitted January 25, 2017 at 11:59PM by stockpikr http://ift.tt/2jhn0Ii
