NEW YORK, July 25 (Reuters) - Some analysts are loading up
on Walt Disney Co. <DIS.N> stock, battered by less-than-magical
earnings, because they believe the entertainment giant could
soon shake off its problems, Barron's reported.
The financial weekly said in its July 26 edition that some
analysts think the company's trading price -- 26-13/16 on
Friday -- fails to adequately reflect the company's assets and
cost-cutting measures now underway.
One J.P. Morgan analyst, who was not identified, told
Barron's he expects Disney to trade up to $43 within the next
12 months and to $52 the following year.
Another Wall Streeter, Scott Black of Delphi Management,
told the weekly he has been buying shares of the company at
current prices on the strength its assets, which include its
brand name, theme parks and cruise ships.
"The assets don't disappear," Black said. "If the company
does a good job, there is no reason the stock couldn't go back
up to $40 or $45."
Another analyst said the company's plan to create a new
Internet company called Go.com by buying the 57 percent of the
Internet portal Infoseek Corp. <SEEK.O> it does not already own
also represents valuable assets.
To cut costs, the weekly said the company is slashing its
annual production of films to 16 from a peak of 40. It has also
gotten a pledge from its ABC television network affiliates to
help defray the costs of its $5.5 billion pact to broadcast
National Football League games, Barron's said.
Disney chairman Michael Eisner said his company will get
past its difficulties.
"I don't think we have unresolvable problems innate to a
decaying business," he told the weekly. "Our problems are
momentary, fashion-oriented and limited. The company isn't
broken."
Disney stock has been bruised in recent months after
results that have failed to excite investors, problems
integrating its acquisition of television network ABC, and
movies that have not been able to match the box office success
of "The Lion King."
Barron's said some Disney watchers it reached suggested the
company spin off some non-core assets, including ABC Radio and
its two cruise ships.
((Wall Street Desk 212 859-1730))
REUTERS |
