Disney's 2017 Slate Of Films Keeps Some Analysts Upbeat On The Stock

Bryan Kraft of Deutsche Bank stated that, overall, Disney's earnings came in better than expected, but breaking down the performance by segment reveals some areas of concern.

Here is how the following Disney segments performed in the quarter, according to the analyst:

• Theme parks showed strong revenue growth and off to a strong start in 2017.
• Broadcasting is also off to a strong start and the ABC unit showed the strongest operating income margin the analyst has seen.
• Cable networks' revenue and operating income fell short of expectations due to lower content licensing revenue and/or lower affiliate revenue.
• Studio also fell short of the analyst's estimates due to lower home entertainment revenue on tough comps.
• Consumer products saw top-line weakness although margins were 100 basis points higher than expected.

Now What?

Looking forward to the year ahead, Kraft suggested that content licensing within the cable networks segment is volatile from quarter-to-quarter and advertising appears to be improving in the second quarter. As such, the quarter's poor performance doesn't necessarily have a negative impact in the coming years.

In addition, the analyst has a favorable outlook for the Consumer Products segment given easier comps ahead and the strong slate of theatrical release of key films, including "Beauty and The Beast," "Cars 3" and "Spiderman: Homecoming."

Shares remain Buy rated with an unchanged $112 price target.