BofA cuts estimates however stays optimistic on Disney amid robust tendencies (NYSE:DIS)

BofA has trimmed some estimates however reiterated its Purchase ranking on Walt Disney (NYSE:DIS), saying underlying tendencies nonetheless look robust within the face of a number of hurdles.

Inflation and Hurricane Ian could have an influence on the corporate’s parks, analyst Jessica Reif Ehrlich stated, however theme park attendance will probably be robust within the fourth quarter.

“We anticipate a number of further tailwinds together with the return of worldwide guests, growing park capability in a number of geographies and the expansion in capability and demand at cruise ships which ought to assist mitigate any potential softness in shopper demand,” she stated.

As for the direct-to-consumer leisure enterprise, the long-planned content material ramp for Disney+ is arriving, she notes, anticipating core home subscriptions to speed up.

“We imagine this positions DIS+ effectively forward of its ad-supported launch in December, for which we imagine there may be strong advertiser demand (however macro volatility),” she stated.

She’s lower This fall income expectations to $21.7B from a earlier $22.2B, a mirrored image of decrease projected Disney+ web provides (to 8M from a earlier 15M), decrease content material revenues and the influence of hurricane park closures. She’s preserving working earnings forecasts for the media aspect, however Hurricane Ian has her trimming anticipated working earnings in Parks to $2.1B from $2.3B.

And a contraction in market multiples means a worth goal lowered to $127, nonetheless implying 31% upside.

As Florida digs out from Hurricane Ian, Disney (DIS) is anticipating a phased reopening of its regional park operations Friday.