Disney stands out for stability, discipline: Barron's
NEW YORK (Reuters) - Walt Disney Co (DIS.N) stands out for its management stability and financial discipline, and long-term investors should be happy, business weekly Barron's said in its latest report.
The report noted that Disney's shares now trade at 14.4 times the next 12 months' forecast earnings, a level last seen in 1990, and that its forward valuation was no higher than that of the Standard & Poor's 500.
Disney shares closed on Friday at $32.57, up around 16 percent from a month earlier thanks to a stronger-than-expected earnings report, but they are still down around 6 percent year-on-year.
The Barron's report said January lows around $28 appear to be "a decent estimate of the downside risk in the stock for now, with $40 being a reasonable target for upside in a year," based on 17 times fiscal 2009 earnings forecasts.
It pointed out that CEO Robert Iger has focused on creating brands and deploying them across other parts of the company, citing the example of Hannah Montana, which has moved from a Disney Channel hit to a series of musical releases and stage shows.
It also quoted Disney CFO Tom Skaggs as saying that while Disney's parks and resorts were not immune to macroeconomic cycles, they were more resilient than the market seems too believe.
A Citigroup analyst downgraded the shares in late January, saying room rates at Disney resort hotels had suggested flagging demand.
(Reporting by Ritsuko Ando; editing by Gunna Dickson)
