Why Is Disney Selling Off?


Summary
·         Disney's shares sold off four percent after comments made by CEO Bob Iger.
·         The comment about this year's earnings isn't really material.
·         Disney's streaming service should become a strong success.
·         Shares are inexpensive and benefit from massive buybacks.
Comments of Disney's (DIS) CEO Bob Iger regarding the company's profits have made the company's shares drop by four percent on Thursday. The guidance cut is not really material and not very surprising either, thus the share price drop below $100 looks more like a reason to buy than a reason to sell, I believe.
Disney's Bob Iger has made a couple of announcements at an investors conference on Thursday morning, among them one that states that Disney's earnings will be roughly in line with the earnings the company produced last year.
During fiscal 2016 Disney has earned $5.73 per share, and most recently analysts were expecting an EPS number of $5.88 for the current fiscal year (ending at the end of the current month).
Analysts were thus estimating an earnings per share increase of 2.6%, which isn't a high earnings growth rate at all -- Iger's statement that Disney's earnings will come relatively in line with those from FY 2016 is thus only a small earnings cut. Relatively in line can mean many things (e.g. a one percent EPS increase), but even when we assume that it means that EPS will not grow at all, this year's EPS will miss the consensus by less than three percent.


 Source : https://seekingalpha.com/article/4105217-disney-selling

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