Why Disney Stock Is Still A "Buy"

{Note that this blog still has an ongoing giveaway contest}

Business Week has an interesting article on why Disney shares right now is a bargain that one shouldn't miss, even with the economic slowdown.

Tuna Amobi, the analyst who follows Disney at Standard & Poor's Equity Research, voices the same upbeat note and rates the stock a strong buy with a 12-month price target of 32 a share. "Amid increased concerns with a consumer spending pullback, we note Disney in recent years implemented some steps to help its parks weather an economic downturn," he says. And compared to its large media peers, Disney's exposure to advertising-dependent businesses is somewhat manageable, adds Amobi. (S&P, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP).In the meantime, Disney posted better-than-expected third-quarter results.

"We have been encouraged by recent trends at ESPN and ABC, and see some multiplatform upside with newer franchises such as Hannah Montana and High School Musical," says the analyst. And in these times of financial stress, Disney's strong balance sheet, with its "ample financial flexibility," is a source of comfort, adds Amobi. He figures Disney will earn $2.32 a share in its fiscal year ended Sept. 30, 2008, and $2.49 in fiscal 2009, up from fiscal 2007's $2.24. Revenues are expected by some analysts to jump to $39.1 billion in fiscal 2009, up from an estimated $37.8 billion in fiscal 2008 and $35.5 billion in fiscal 2007.

We certainly have been stocking up (no pun intended) on Disney stocks while they are still well below the $30 mark.

Zz.