‘All the fundamental issues are still there’ for Disney: Tom Rogers
- Disney raised its dividend after beating Street estimates in Q1 last night.
- Tom Rogers still says market has overreacted optimistically to its Q1 print.
- Shares of the Walt Disney Co opened some 8.0% up on Thursday morning.
Market may have “overreacted optimistically” to Q1 results the Walt Disney Co (NYSE: DIS) reported last night, says Tom Rogers – a media industry mogul and current executive chairman of Oorbit Gaming.
Why does Tom Rogers remain cautious on Disney?
Copy link to sectionDisney raised its dividend after beating Street estimates and materially narrowing its DTC loss in its first financial quarter as Invezz reported here.
Still, Rogers sees challenges ahead for the entertainment conglomerate as “all the fundamental issues on streaming and traditional TV are still there”.
On CNBC’s “Squawk Box” this morning, he questioned the “profitability trajectory” of the company’s streaming business which is about $4.0 billion behind where Netflix was when it had the same number of subscribers and similar revenue, as per a new MoffettNathanson report.
$DIS opened some 8.0% up on Thursday morning.
Rogers view on ESPN partnering with Fox and WBD
Copy link to sectionTom Rogers also cited a decline in ad revenue on Hulu – the “granddaddy of advertising” for his cautious view on Disney.
ESPN partnering with Fox and Warner Bros. Discovery to launch a joint sports streaming platform this year is a “skinny bundle of channels” and is not really a simplified answer to the needs of heavy sports enthusiasts, he added.
A continued decline on the linear side also remains an issue for the Walt Disney Co, the expert concluded. Note that the New York listed firm is currently in a proxy fight with activist investor Nelson Peltz as well.
Still, Wall Street currently rates $DIS at “overweight”.
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