
Walt Disney (DIS) Stock Continues to Fall on ESPN Concerns
NEW YORK (TheStreet) -- Shares of the Walt Disney Co. (DIS) - Get Report are retreating by 4.92% to $105.09 on very heavy trading volume on Thursday afternoon, as investors are concerned over the subscriber losses at the company's ESPN business.
Disney, the company behind the Mickey Mouse character, "The Avengers" and other Marvel superhero movies, and the Walt Disney World theme park in Florida, reported mixed earnings results for the 2015 third quarter on Tuesday afternoon.
During Disney's earnings conference call CEO Bob Iger noted that ESPN suffered "some subscriber loss" sparking the selloff.
For the most recent quarter, Disney posted earnings of $1.45 per share on revenue of $13.1 billion. Analysts surveyed by Thomson Reuters had forecast for earnings of $1.42 per share on revenue of $13.2 billion for the quarter.
Insight from TheStreet Research Team:
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUScharitable trust portfolio, commented on the Disney selloff in a post this morning on RealMoney.com. Here is a snippet of what Cramer had to say:
Is this the end of the world for the media stocks?
No, but it is the end of their high valuations.
I will say up front that Disney (DIS), which is the proximate cause of this decline, is the best-integrated media company in the universe, and I reiterate that this weakness is a buying opportunity.
Why does it continue to go down? (The stock was recently almost 5% lower at around $105.) Because stocks that have gigantic declines on day one, like Disney had yesterday, tend not to be able to rally on day two. That's because of the mechanics of Wall Street: The big institutions that were selling yesterday down 10 points haven't finished cleaning house yet.
I reiterate that once the smoke clears and the big sellers are finished, Disney will be in there buying back stock -- and you should be in there with them. But the sheer amount of stock for sale is causing the dislocation, and it has to run its course before the stock can start going higher again.
-Jim Cramer "Still Plenty of Magic Left in Disney Shares" Originally Published on August 6, 2015 on Real Money.
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Separately, TheStreet Ratings team rates DISNEY (WALT) CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
You can view the full analysis from the report here: DIS Ratings Report
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