Analysts are bracing for bad news on

Walt Disney Co.

(DIS) - Get Report

, but one still has to wonder if they've been watching reruns of "Lost" instead of keeping up with all the latest grim economic news.

Even after last quarter's earnings disappointment, shares of Disney have performed relatively well over the past year. Though the stock is down more than 40% from its 52-week high, roughly matching the

S&P 500

, media peers like

News Corp.

(NWS) - Get Report



(CBS) - Get Report

are down by more than 65% from their peak levels.

The reason, according to research from Sanford Bernstein analyst Michael Nathanson, is mostly revenues from its cable division, which has locked in long-term contracts with providers like



. However, the analyst points out that non-cable businesses such as broadcasting and amusement parks accounted for two thirds of operating profit growth since 2005, and he believes these businesses have issues.

Nathanson is not alone. Moody's Investors Service in October predicted a 15% to 20% drop in broadcasting revenues, a call Moody's analyst Neil Begley says was widely seen as too bearish at the time.

But is it bearish enough? Begley says such a decline would not be unprecedented in his career, but aren't we experiencing, or headed toward, the worst downturn since the 1930s?

"Everybody says that, but I don't see it," Begley says. "In the thirties, people were standing in bread lines. I don't know if it's just my part of the country, but I see people standing in line at the mall to buy iPods."

Estimates for revenue declines at Disney's theme parks appear similarly muted. Nathanson projects a 5% drop in U.S. theme park attendance and a 28% drop in U.S. revenues.

The attendance number in particular seems hard to believe, even with what S&P equity analyst Tuna Amobi notes are some historic promotions, such as admission for seven people for the price of four. In the quarter after Sept. 11, 2001, attendance fell by 17%.

But Nathanson told

in an email exchange that his projection is based in part on the 4% drop reported from

General Electric

(GE) - Get Report

unit NBC Universal last month at its Florida theme parks, as well as a strong boost from the two-week period around Christmas, which he says was well attended.

Still, given all the negatives, it is hard to understand why Nathanson and Amobi are neutral on the stock. Nathanson points to high-quality assets and management, plus those recurring revenues from cable networks like ESPN. They are locked in for many years by contracts and grow by high single digits, he writes.

These factors may be enough to put a floor under the share price, but even these productive properties are feeling the pinch.


last week said it had instituted a hiring freeze and is eliminating jobs.

All of which suggest Disney's current share price is based more on fairy dust than fact.