Slower Growth Expected for Disney Consumer Products Revenues
Trefis members predict slightly lower revenues for Disney (NYSE:DIS) over the Trefis forecast period from sales of merchandise (toys, games, memorabilia, kids clothing) at Disney stores. However, slower consumer products revenue growth will have little impact on Disney, since Consumer Products constitute only around 7% of the $37 Trefis price estimate for Disney’s stock (12% above the current market price of $33).
The majority of Disney’s value instead comes from its media properties (ESPN, Disney Channel, ABC Broadcasting, etc.) where Disney competes with companies like Time Warner (NYSE:TWX), News Corp (NASDAQ:NWS), CBS (NYSE:CBS), and Viacom (NYSE:VIA).
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The average of Trefis member forecasts for Consumer Products Revenue indicate an increase from $3 billion in 2010 to $3.8 billion by 2016, compared to the baseline Trefis estimate of an increase from $3.1 billion in 2010 to $4 billion by the end of the Trefis forecast period. The member estimates imply a small downside to the Trefis price estimate for Disney’s stock. In the past, Consumer Products Revenue has increased from around $2.2 billion in 2005 to $3 billion in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Disney’s stock to Consumer Products Revenue.