The Walt Disney Company says business is going very well and is poised to continue on that track, advertising sales are in line with expectations and the company’s stock price is attractive. So it is planning to be a major buyer of its own stock.
According to Wells Fargo analyst, Disney is looking to buy back no less than $6B worth of its own stock, and perhaps as much as $8B – and may borrow money to do so.
Ryvicker said that Disney execs believed that such a move could be accomplished without doing any damage to its credit rating, a comment which was quickly confirmed by the debt watchdogs at Moody’s Investor’s Service. Moody’s did not go into any detail, but issued a statement to the effect that the move would indeed change nothing in regard to the company’s rating.
Ryvicker said Disney sees advertising trends as being “pretty good” with decent upfront pricing and volume for both ABC and ESPN.
Basic cable leader ESPN is also more than holding its own, with seven major affiliate deals under its belt and the final three majors almost there. Disney says it is not feeling much negative effect from Fox’s new entry into the cable sports business, pointing out that its YOY viewership increase is equivalent to Fox’s total viewership.
Wells Fargo rates Disney Outperform.