Credit Suisse downgraded Walt Disney Co (DIS) from “Outperform” to “Neutral”, as weakness in the company’s theme parks business may offset strong performance of its streaming business.
The bank also cut its 12-month price target on the stock from $140 to $116 and its full-year 2020 earnings forecast to $1.67 per share from $2.25 per share.
Walt Disney shares closed lower for the fifth time in the past ten trading sessions in New York on Monday. It has also been the steepest single-session loss since March 27th. The stock went down 4.10% ($4.37) to $102.26, after touching an intraday low at $102.07, or a price level not seen since April 16th ($100.89).
Shares of Walt Disney Company have retreated 29.30% so far in 2020 compared with a 12.62% loss for the benchmark index, S&P 500 (SPX).
In 2019, Walt Disney’s stock went up 31.90%, thus, it outperformed the S&P 500, which registered a 28.88% gain.
“We believe Disney’s 24% rally the past month was well deserved as liquidity concerns appeared overblown, and we continue to see a path to ~$160/share for Disney the next few years – streaming value creation should easily outstrip linear TV declines, and we expect a full rebound in theme park and Hollywood operations over time,” Credit Suisse analyst Douglas Mitchelson wrote in an investor note.
“However, near- to mid-term we expect Disney will remain in a more narrow trading range given a remarkable lack of operational visibility, expected severe cuts coming to street estimates (we are 29% below for FY21 EPS), and a now more equally balanced mix of positive and negative catalysts,” the analyst noted.
Meanwhile, UBS also revised down its rating on Disney’s stock from “Buy” to “Neutral”.
Analyst stock price forecast and recommendation
According to CNN Money, the 24 analysts, offering 12-month forecasts regarding Walt Disney’s stock price, have a median target of $124.00, with a high estimate of $175.00 and a low estimate of $100.00. The median estimate represents a 21.26% upside compared to the closing price of $102.26 on April 20th.
The same media also reported that at least 16 out of 27 surveyed investment analysts had rated Walt Disney’s stock as “Buy”, while 9 – as “Hold”.
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