Nomura Stays Bullish on Walt Disney, Despite Movie Flop (DIS)

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Entertainment giant The Walt Disney Company ( DIS ) on Tuesday caught some further positive commentary from analysts at Nomura Securities, despite massive expected losses from a recent movie release.

The firm maintained a "Buy" rating on DIS and a $46 price target, which implies a 6% upside to the stock's Wednesday closing price of $43.44.

Nomura Analyst Michael Nathanson commented, "Last night, Disney perhaps unsurprisingly announced that it expects to recognize a material loss on the studio's most recent film release, John Carter. However, at $200mn the real surprise was the amount, which was much higher than most had anticipated (including us)…Adjusting for the higher John Carter film losses, we are lowering segment EBIT by $152mn to -$115mn for the quarter. Our F2Q EPS estimate drops by an additional $0.05 to $0.51, while FY12 EPS moves to $2.90 (from $2.96 previously)."

The firm painted a positive picture of Disney's over health, however. Continuing, "As with last year's film write down, we believe that one-off charges at the Studio segment are not indicative of the overall health of the company's core businesses - namely the Media Networks and Parks. We view any pullback in the stock around this higher film loss as an enhanced buying opportunity."

Disney shares fell 52 cents, or -1.2%, in premarket trading Tuesday.

The Bottom Line
Shares of Walt Disney ( DIS ) have a 1.38% dividend yield, based on last night's closing stock price of $43.44. The stock has technical support in the $36-$38 price area. The stock is trading near all-time highs of $42-$44 a share.

The Walt Disney Company ( DIS ) is not recommended at this time, holding a Dividend.com 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 The NASDAQ OMX Group, Inc.

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