The firm said it lowered its rating on the family entertainment, media, and resorts and theme parks company, based on a valuation call, and its belief a stronger dollar could be damaging to Walt Disney.
Topeka Capital said it was concerned over how the strong U.S. dollar would affect theme park attendance at Disney's Orlando location over the next fiscal year, and into 2016.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Shares of Disney are down by 0.58% to $92.40 in pre-market trading this morning.
Additionally, Disney is ready to take the holiday shopping season by storm as the enormous success of its 2013 animated film Frozen, has resulted in a huge demand for Frozen related toys, especially dolls. As a result Mattel's (MAT) Barbie Doll was knocked from first place for most in demand toy for the 2014 holiday season, in favor of Frozen themed items, Bloomberg reported.
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 solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.24% over the past year, a rise that has exceeded that of the S&P 500 Index. 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 11.7% 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 $4.25 versus $3.38 in the prior year. This year, the market expects an improvement in earnings ($4.66 versus $4.25).
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.0%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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.
- You can view the full analysis from the report here: DIS Ratings Report