Consumer Stocks Retreating; Goldman Drops Disney From Conviction Buy List, Citing Pressure on ESPN


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Top Consumer Stocks,

WMT -1.2%

MCD -1.4%

DIS -2.2%

CVS -2.4%

KO -2.1%

Consumer stocks are lower today with shares of consumer staples companies in the S&P 500 retreating 1.8%. Shares of consumer discretionary firms in the S&P 500 also are down about 1.8%.

In company news, The Walt Disney Co ( DIS ) is down 2.2% to $62.90 a share, sliding as low as $62.47 with Goldman Sachs today removing the media conglomerate from its Conviction Buy list and dropping it rating for the stock to Neutral, writing that following a 35% year-to-date run-up in its share price, the risk/reward ration is no longer as compelling.

According to a new research note, the Goldman analysts believe the company's ESPN unit - its largest asset - faces significant overhang resulting from increased competition for advertising revenue from Fox Sports and other 24-hour cable sports providers as well as rising costs starting in 2014 to maintain its broadcast rights to Major League Baseball, NFL Monday Night Football and college football's BCS Championship games - pressuring DIS' future margins and per-share earnings.

Goldman is maintaining it 12-month price target at $70 a share based on 17 times its calendar year 2014 per-share earnings.

In other sector news,

(+) GME, (+6.4%, has hit fresh year highs) Microsoft scraps new restrictions for its new Xbox One game consol on selling, sharing or trading games - a key part of GME's business.

(-) FIVE, (-4.7%) Launches secondary offering of 8.6 mln shares by selected shareholders, including company executives and board members. The discount retailer currently has about 54 mln shares outstanding.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

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