Analyst Downgrades Disney Stock, But Touts As TV Property

by Wayne Friedman , March 16, 2015

Walt Disney Co. stock has been downgraded by one influential media analyst due to concerns over increased commercial-skipping, rising cord-cutting activity and the growing stand-alone digital TV services.

With regard to new cloud-based digital TV services, Richard Greenfield, media analyst for BTIG Research, writes: “We and investors expected Disney to be left out of smaller bundles... we have to imagine other smaller bundles without ESPN will emerge.”

Still, Greenfield gives Disney credit for making an early deal with new services -- as it did for some of its TV networks -- with Dish Network’s Sling TV. “We love that Disney is willing to disrupt itself.” He adds: “Disney is clearly best positioned among its broadcast/cable network peers.”

But while giving Disney credit by offering must-have channels, such as ESPN, the sports TV cable network powerhouse, he says: “We are increasingly struggling with the question of whether anyone in the sector can flourish as consumer behavior shifts away from traditional television viewing, not to mention a complete lack of interest in wasting time on commercials.”

Greenfield says that while being “enamored with the Disney stock for almost five years,” he is downgrading the stock to neutral from a buy. Midday trading of Disney’s stock was up 1.1% to $107.60.

cable tv, economy, media, tv

3 comments about "Analyst Downgrades Disney Stock, But Touts As TV Property".

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Ed Papazian from Media Dynamics Inc, March 16, 2015 at 1:44 p.m.
I must say that consumer avoidance of commercials is an odd reason to devalue Disney stock----unless it is so out of proportion, relative to other TV time sellers, that advertisers will shun Disney because of it. Sounds like a real stretch to me.
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Kevin Horne from Verizon, March 17, 2015 at 12:57 p.m.

C'mon Ed - consider the source. If he only has one drum to bang, he will bang it loud and long LOL (LAL??)

Nicholas Schiavone from Nicholas P. Schiavone, LLC, March 17, 2015 at 7:18 p.m.

Dear Mr. Friedman,

You have abdicated your responsibility as a professional media journalist to think about what you are reporting.

I have as a great a problem with your inability to discern lack of face validity as I do with Richard Greenfield's/BTIG Research's deficient assessment of the Disney Stock and its successful performance across the cross-section of businesses sectors with which Disney is engaged.

Your reporting error is compounded by the illogical headline to this story. If TV commercial skipping is an issue for Disney, why is the Disney stock "Tout"ed as "TV Property." If anything, on a advertising research basis, Disney media properties are probably far less vulnerable to "ad avoidance" than other TV properties.

Wayne, I would research both the gaps in Mr. Greenfield's knowledge and judgment, as well as Greenfield's and BTIG Research's motivation in downgrading Disney by switching a clear "buy" to a "neutral."

Speaking of face validity, I encountered three professional women this morning who spent yesterday evening in a theater watching "Cinderella" on a school night so that children wouldn't grab all the seats.

In toto, Disney is a spectacular business with spectacular products and brands and deeply devoted customers who are on board for the long term.

As one professional women said to me, "No one does a Princess better than Disney."

Perhaps Greenfield understands his spreadsheets better than he understands the meaning of a Cinderella story. How unfortunate.

Wayne, be more careful and critical going forward. If I wanted "The National Enquirer," I'd buy it. MediaDailyNews is so much better.

Onwards & Upwards!

Sincerely,
Nicholas P. Schiavone