Morgan Stanley’s Benjamin Swinburne and team lowered their 3rd quarter earnings estimate on Walt Disney (DIS)–despite the big boost provided by Frozen’s continued success:Yoshikazu Tsuno/Agence France-Presse/Getty Images
While F3Q14 faces tough theatrical comps vs. last year (Iron Man 3, Monsters University), robust box to date aided by Captain America and Maleficent should help minimize downside. Frozen will likely be a source of continued upside to Home Video, as well as a key driver of sustained Consumer Products strength. At CP, we forecast double-digit growth to continue for both licensing and retail revs in F3Q, particularly as supply constraints further ease on Frozen merchandise…
On a consolidated basis, we raise our Studio, CP and Interactive estimates, partly offset by a reduction in ESPN and ABC ad sales. However, lower deferred revenue recognition at ESPN results in our F3Q14 EPS estimate of $1.13 ($1.16 prior). We bump up our PT to $85 (mid-CY15), or 17x forward EPS.
Shares of Walt Disney have gained 0.4% to $83.09 at 2:12 p.m. today.