UBS: Ignore Disney's ESPN woes for these five reasons (DIS)

pulse

May 10, 2017 5:26 PM

While falling revenues at ESPN are a growing concern for many investors, UBS said to look past the troubled sports network for these five reasons.

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The media giant earned $1.50 in adjusted earnings per share during its fiscal second quarter and $13.3 billion in revenue.

Analysts had forecast that Disney would report $1.41 in adjusted EPS and revenue totaling $13.45 billion, according to Bloomberg.

UBS equity research circulated a note to clients May 10, urging clients to buy shares of Disney on any pullbacks.

UBS analyst Steven Milunovich said, "we would view any weakness as an attractive buying opportunity."

While falling revenues at ESPN are a growing concern for many investors, UBS said to look past the troubled sports network, staying bullish on Disney for these five reasons:

1) "Terrific content and Parks performances and outlook."

2) "Healthy diversification (ESPN is only 21% of earnings)."

3) "After a 3-year hiatus, its affiliate renewal cycle is restarting, while its sports cost step-ups cycle is ending."

4) "Outsized winner if virtual MVPDs are successful," referring to multi-channel video programming distributors that put out content in various ways, often for a subscription fee.

5) "Has the strongest balance sheet by far."

Click here for a real-time Disney chart.

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