Wednesday, 10 May 2017

DIS - earnings were good

Whilst the main market saw a day of minor chop, there was notable sig' weakness in Disney (DIS), which settled -2.3% at $109.53. Near term outlook is somewhat bearish, as there is 'magnet' support around $105. Mid term outlook remains very bullish. A break above the 2015 high remains due.

DIS, daily

DIS, monthly


I strongly suggest you see:

Q1/H2 report:

Frankly, 'good' is probably under-stating the results. When you dig into the accounts, everything looks excellent in Disneyland. Q1 EPS was $1.50, a sig' increase from Q4 $1.30.

Many are still bearish Disney, such as this analyst from Bernstein...

There is a focus on ESPN, and yes, its a struggling business. Yet Disney has many parts to it, not least the world's best movie/TV franchises of Star Wars and Marvel.

With an extrapolated annual EPS of $6, that offers a PE of around 18. Disney certainly isn't cheap, but neither is it expensive. Indeed, its valuation is broadly inline with the main market.

Disney pays two dividends a year, the latest to April 2017 was $0.78, with the prev' half year of $0.71.

I remain very bullish Disney. A break above the summer 2015 of $119.51 seems a given, not least within a broadly 'scary strong' US equity market. Any price action >119 will offer the 125/130s before year end.