The Fly on the Wall wrote today, that Caris & Co believes Disney is benefiting from outstanding fundamentals and strong brand positioning at its Media Networks unit. However, the firm has concerns about the short-term outlook for Disney's domestic theme parks.
While Chuck Carlson, the industry's leading expert on dividend reinvestment plans, cautions on July 8, that Companies dependent on consumer spending have been under a cloud on Wall Street. However, Disney is one of those consumer-dependent stocks where conventional wisdom may not be correct. With $4-per-gallon gasoline, one would think that the high cost of travel would take some steam out of the firm's theme park attendance. However, recent results on this front were decent, and the firm's other businesses have held up, too. To be sure, a prolonged recession would impact business. Still, Disney has done a nice job of positioning its theme parks as an affordable vacation for families, and that should help it continue to weather
economic weakness.
On July 7, Anthony DiClemente, an analyst with Lehman Brothers, announced a downgrade of Disney stock from "Equal Weight" to "Underweight" accompanied by a "Negative" rating for their entertainment division.
DiClemente wrote, "The structural shift created by ubiquitous technological change - a shift that has materially impacted the music industry - could also disrupt the core economic models of the film and television studios." Lehman is comparing the effect of digital content distribution in the music industry to Disney's TV and film content.
Analysts also are anticipating a downturn at the Disney theme parks as a result of the continued cutback in flights to Orlando accompanied by a rising airfare costs.
Following the Lehman Brothers announcement, premarket trading saw a drop in Disney shares from $30.90 to $29.98.
Below, I copy a part of Ashkan Karbasfrooshan's Article in SA, entitled "Where Is the Online Video Advertising Revenue Going?". Here is:
- Disney = $100M.
Disney (DIS) consists of ESPN.com, Disney.com and ABC.com. That is a lot of video inventory.
Moreover, Disney is actually quite the king of online media. Well, at least it was, before News Corp. and CBS (CBS) spent $2B in 2 years to accelerate their efforts. But the bulk of Disney’s $1B+ digital sales come from ticket sales at its themed parks, as well as merchandising… however, you know online advertising figures prominently, and video advertising growing quickly.
I had done an analysis previously, with Disney’s range coming in at a monthly low of $1M to a high of $7M.
Is it right? Who knows… do I look like Nostradamus? Unless you have a better idea, let’s assume the math makes sense… however, given a few factors, I now put Disney on the higher range, and give them an annual revenue from video advertising of $100M.As shown on the chart below, Disney's short interest ratio shows very high that is measure of investors pessimism. But as contrarians, it can be seen as buying opportunities.
Source: Schaeffer's Investment Research, Inc.According to the Technical Chart below, Disney prices are indicated bullish reversal patterns in short time.
The Chart below shows Disney's Financial Ratios:
Source: istockanalyst.comPlease Note!
This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.
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