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Get ready to buy Disney stock this summer, when it should underperform as per usual, according to Goldman Sachs analyst Anthony Noto.
The analyst said the Walt Disney Co. hasn’t kept pace with the S&P 500 during the June-September frame in the past 10 years, though it recovered toward the end of seven of those years.
This summer “is particularly attractive,” Noto said, “given a 5% pullback and our expectations for double-digit growth for the back half of 2007 and into fiscal-year 2008, with the potential to outperform.”
Noto has a $43 price target on shares, which closed Friday at $34.14.
Disney investors, Wall Street observers noted, oftentimes get spooked during the summer when gasoline prices are high enough to potentially discourage travel to theme parks and when hype surrounding big movies already are priced into shares. Noto and others see these periods of concern as buying opportunities.
Separately, Bank of America soured a bit on the exhibition industry Friday, downgrading Regal Entertainment Group from “buy” to “neutral” and reining in its price targets on Cinemark Inc. and Carmike Cinemas.
Bank of America is concerned that big movies are fading quicker than had been expected.
The firm sees Regal shares climbing to $23 from $21.35 on Friday, while Cinemark shares will go to $20 from Friday’s $17.42 close; Carmike shares ought to climb to $25, whereas they traded Friday at $23.05.
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