Why This Analyst Thinks Disney And This Company Are Uniquely Positioned In The Media Space

Traditional media companies are under pressure as ad dollars shift from linear TV to streaming, but Walt Disney Company DIS and Comcast Corporation CMCSA are relatively better positioned, an analyst at KeyBanc Capital Markets said.

The Media Analyst:  Brandon Nispel has an Overweight rating and a $151 price target for Disney shares. The analyst rates Comcast at a Sector Weight, with a fair value of $42.

The Media Thesis:  Disney and Comcast's Universal Theme Park attendance are continuing to see improvement in attendance in April, analyst Nispel said, citing KeyBanc's domestic geolocation data. The year-over-year growth relative to 2019, however, is decelerating, particularly for Disney, he added.

The analyst noted that California is tracking better than Florida, apparently reflecting the weather and international visitation.

Related Link: 'Disney The Only Asset We Want to Own in Media,' Analyst Says Following Q2 Results

Investors have flagged a potential pullback in domestic consumer spending and deceleration in per capita spending, the analyst noted. This risk, according to the analyst, will likely materialize in 2023. At that juncture, international visitation, which is still less than two-thirds of pre-COVID levels, could serve as an offsetting factor, he added.

KeyBanc maintained its second-quarter estimates remain unchanged at a 3% decline for Disney's domestic park revenues but a 7% increase for Comcast's theme park revenue.

"We see DIS and CMCSA as unique in media as theme parks are a highly profitable business that provides traditional media businesses the resources to transition from linear TV to streaming," the firm said.

Media Stock Price Action:  On Friday, Disney shares closed up by 3.52% at $109.33, and Comcast stock closed 0.07% higher at $44.16, according to Benzinga Pro data.

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