Strong 2nd Half Expected for Disney


Goldman Sachs media analyst Anthony Noto maintained his “buy” rating on The Walt Disney Co., but raised his 12-month price target from $43 per share to $45 per share, based on strong expected performance in its broadcast, cable and theme-park units.

Following a 35% gain in operating income in the first half of the year, Noto predicts that there is at least another 20% growth left in the rest of the year.

Noto wrote in a research report that he expects the film unit to be driven by strong international box office results for the third installment of its Pirates of the Caribbean movie series, positive ratings momentum at its ABC broadcast network, the unwinding of affiliate fee deferrals and positive advertising trends at its ESPN cable network and leverage from modest theme park attendance growth.

Disney is expected to release its fiscal third quarter results on Aug. 1 after the market close.

Noto estimates the media giant will report $8.8 billion in revenue (up 4%), operating income of $2.1 billion (up 8%) and earnings of 54 cents per share (up 4%).

Noto estimates that broadcast revenue will rise 2% to $1.4 billion and operating income at the division will increase 33% to $173 million.

At the cable networks, revenue is expected to rise 13% to $2.5 billion and operating income should increase 13% to $1.1 billion in the period.

The theme parks should see 4% growth in revenue and a 9% increase in operating income, according to Noto.