Needham & Company Reiterates its “Hold” Rating on Disney (DIS)

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Entertainment giant The Walt Disney Company ( DIS ) 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 Tuesday.

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 ( DIS ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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

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