Entertainment giant The Walt Disney Company (
) saw its "Hold" rating reiterated on Tuesday by analysts at
Needham & Company.
The firm commented, "We are maintaining our 3Q10 revenue
estimate at $9.378B (up 9% y/y), and EBITA of $2.08B (up 13% y/y).
We are raising our EPS estimate by $0.02 to $0.58 (up 11% y/y), to
reflect a lower tax rate of 36% for the balance of FY 2010. We are
fine tuning our FY3Q10 revenue mix to reflect changes discussed in
detail in this report. In summary, our revised 3Q estimates reflect
our expectation for a solid quarter based on strong performances
from DIS's film studio, lead by the opening weekend success of Toy
Story 3 and better than expected results for the DVD sales of Alice
in Wonderland, the contribution from Marvel and it's Iron Man
franchise, and a solid ad market for the Cable Networks."
Continuing, Needham said "For 4Q10, we shifted a portion of
Cable Networks revenues to 3Q10, resulting in lower revenue,
$10.28B, up 4% y/y and down 1.3% from prior estimates, and lower
EPS, down $0.01 to $0.50, up 5% y/y. For FY 2011, we are
maintaining our estimates for revenue of $40.252B, up 6% y/y, and
EPS of $2.33, up 14.8%."
Disney shares rose 12 cents, or +0.4%, in premarket trading
The Bottom Line
We recently removed shares of DIS from our recommended list, when
the stock was trading at $37.04. The company has a 1.12% dividend
yield, based on Friday's closing stock price of $31.38. The stock
has technical support in the $29-$30 price area. If the shares can
firm up, we see overhead resistance around the $34-$35 price
levels. We would remain on the sidelines for now.
The Walt Disney Company (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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