* Shares close down 9.1 pct
* Analysts lower price targets
* Worries about theme parks, media raise questions
* Shares fell as much as 14.7 pct during session
(Adds details on ESPN revenue)
By Lisa Richwine
LOS ANGELES, Aug 10 Shares of Walt Disney Co
(DIS.N) were hammered on Wednesday as Wall Street worried how
the company's steady-growth media and resort businesses would
fare if consumers get pinched in a weak economy.
Disney shares closed 9.1 percent lower at $31.54 after
falling nearly 15 percent earlier in the session, one day after
quarterly results failed to inspire investors already nervous
about theme park revenue and the sustainability of an
Several brokerages lowered expectations after the results,
which followed a rare earnings miss in the previous quarter.
Barclays Capital, Wunderlich Securities, RBC and Evercore
Partners all cut their price targets and lowered forecasts for
those core divisions.
"Given an uncertain consumer, we are taking a more
conservative stance on our estimates going forward," including
lowering estimates for ESPN advertising revenue, said Barclays
Capital analyst Anthony DiClemente. He lowered his price target
for Disney shares to $44 from $52.
The company's shares fell much more than those of rivals
like Time Warner Inc (TWX.N), which dropped 4.6 percent. Disney
lost some $6 billion in market value even after the shares
recouped some of their losses in afternoon trading. They still
finished with a considerably sharper drop than the 4.4 percent
fall in the broader S&P 500.
The operator of theme parks, the ESPN sports and ABC
broadcast networks and a movie studio is known for consistently
beating analysts' expectations. But the company had reported a
miss when it released fiscal second-quarter results in May.
In fiscal third-quarter results reported on Tuesday, the
Mouse House beat most analysts' expectations. But that came
after it recorded $228 million in ESPN revenue that was
expected in the fourth quarter, nearly 5 percent of the $4.9
billion in total revenue for the company's media networks.
Disney "has not lived up to the earnings-beatings behavior
it is known for," Nomura Securities analyst Michael Nathanson
said in a note to clients. He lowered his price target on the
shares to $42 from $45.
Disney executives told analysts the company is not seeing
any advertiser downturn at its TV networks, and hotel bookings
were down 2 percent less than the company had forecast.
But they also warned about higher programming and
production costs at ESPN, lower syndication sales at ABC and
tough year-over-year comparisons for its studio division in the
Wunderlich Securities analyst Matthew Harrigan lowered his
rating on Disney to "hold" from "buy," saying the company's
asset value appeared "excessively ... oriented toward ESPN."
"Disney has major upside off better monetization of Disney
Pixar, Marvel, ABC, and the parks, but this hinges on creative
execution and the economy," Harrigan said in a note to
RBC Capital Markets analyst David Bank, who cut his price
target to $43 from $48, said ESPN ad growth and margins at
theme parks were "softer than expected" in the just-ended
"While years of execution justify 'best of breed' premium
valuation, we think several quarters of 'misses' could make it
somewhat vulnerable," Bank said in a research note.
(Additional reporting Yinka Adegoke in New York; editing by
John Wallace, Gary Hill and Andre Grenon)