Walt Disney Co Stock Buy Recommendation Reiterated (DIS)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Walt Disney (NYSE: DIS) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:
  • DIS's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 9.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 31.74% and other important driving factors, this stock has surged by 43.03% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DIS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • DISNEY (WALT) CO has improved earnings per share by 31.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DISNEY (WALT) CO increased its bottom line by earning $3.12 versus $2.52 in the prior year. This year, the market expects an improvement in earnings ($3.49 versus $3.12).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Media industry and the overall market, DISNEY (WALT) CO's return on equity exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $2,160.00 million or 19.20% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.39%.

The Walt Disney Company operates as an entertainment company worldwide. Its Media Networks segment engages in broadcast television network, television production and distribution, television stations, broadcast radio networks and stations, and publishing and digital operations. Walt Disney has a market cap of $116.4 billion and is part of the services sector and media industry. The company has a P/E ratio of 22.00, above the S&P 500 P/E ratio of 18.00. Shares are up 26.7% year to date as of the close of trading on Friday.

You can view the full Walt Disney Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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