BATTERED MOUSE BACK FROM BRINK?Byline: Dave McNary Daily News Staff Writer
Is it time to load up on Mickey Mouse Mickey Mouse
Famous character of Walt Disney's animated cartoons. He was introduced in Steamboat Willie (1928), the first animated cartoon with sound. Mickey was created by Disney, who also provided his high-pitched voice, and was usually drawn by the studio's head animator, again? Has he been punished enough?
Shares of Burbank-based Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966)
Disney, Walter Elias Disney Co. rose nearly 11 percent Tuesday in the first positive news for shareholders all summer, gaining $2.9375 to $30.375 to erase all but 25 cents of Monday's loss.
But that's little relief for stockholders, since Wall Street has spent the summer knocking down the entertainment giant. Since hitting a split-adjusted high of $42.33 on May 4, Disney dropped more than 35 percent through Monday's meltdown meltdown
Occurrence in which a huge amount of thermal energy and radiation is released as a result of an uncontrolled chain reaction in a nuclear power reactor. The chain reaction that occurs in the reactor's core must be carefully regulated by control rods, which absorb , making it the second-worst performer among the Dow Jones Dow Jones
the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202]
See : Finance industrial average's 30 blue chips in that time. Only Boeing Co. turned in a worse performance.
Tuesday's gain lifted Disney to 24th place from 29th among the Dow 30 since it peaked four months ago. Aside from Monday's $3.1875 decline, the worst day came on June 30 - a $2.71 plunge to $35.03 after seven analysts cut earnings estimates due to disappointing results in movies, videos and consumer products.
Disney subsequently posted better-than-expected returns for three late-summer movies: ``Armageddon,'' with nearly $189 million in domestic grosses; ``The Parent Trap,'' over $56 million; and ``Halloween: H20,'' topping $50 million. With foreign, video and TV revenues included, all should be solidly profitable.
In recent weeks, the stock's ongoing decline has led several analysts to conclude Disney may now be significantly undervalued Undervalued
A stock or other security that is trading below its true value.
The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. . ``We are definitely telling investors to take advantage of the opportunity to purchase high-quality companies like Disney,'' said Linda Bannister of Edward Jones Edward, Eddie, or Ed Jones is the name of:
Stewart Halpern of ING Barings Furman Selz reiterated his buy rating Tuesday and predicted the stock will hit $40 at the end of the year and $48 to $50 at the end of 1999. He noted that at the $27.50 price, its relative valuation was lower than in 1991, when the recession knocked theme-park attendance and broadcasting ad spending to their biggest declines in 20 years.
``We believe the relative valuation is compelling,'' Halpern said, noting the stock was 44 percent below the average of global consumer-brand-driven stocks.
Halpern projected Disney's performance in the current quarter ending Sept. 30 will continue on track with previously issued estimates. He said theme-park attendance is holding up while creative content (which includes movies and videos) has improved over last quarter despite continued slowness in Asia.
DISNEY AND THE DOW
Burbank-based Walt Disney Co. has had a volatile ride on Wall Street this year. After rising steadily from the beginning of the year to early May, shares of Disney dropped 35 percent by Monday. Yet on Tuesday, it was the biggest gainer among the 30 companies that comprise the Dow Jones industrial average Dow Jones Industrial Average
The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. .
Jan. 2, 1998: $33.05
Aug. 31, 1998: $27.44
Sept. 1, 1998: $30.38
BEST AND WORST OF DOW JONES INDUSTRIAL AVERAGE (Since May 4)
Wal-Mart Stores + 15.06%
Philip Morris Co. + 6.23
Eastman Kodak + 2.54
Hewlett-Packard - 35.25
Walt Disney Co. - 35.25
Boeing Co. - 39.49
TODAY`S RESULTS (x)
Walt Disney Co. +9.79
Caterpillar caterpillar (kăt`əpĭl'ər, kăt`ər–), common name for the larva of a moth or butterfly. Caterpillars have distinct heads and are segmented and wormlike. Inc. +8.74
AT&T Corp. +6.98
McDonalds Corp. +6.80
Boeing Co. +6.67
Sears Roebuck +5.64
Alum. Co. of America +5.43
Merck & Co. +5.28
United Tech Corp. +5.25
J.P. Morgan +5.11
Johnson & Johnson +5.07
American Express American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company is best known for its credit card, charge card and traveler's cheque businesses. +5.05
IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) +4.72
Procter & Gamble +4.58
Wal-Mart Stores +4.57
Coca Cola Noun 1. Coca Cola - Coca Cola is a trademarked cola
cola, dope - carbonated drink flavored with extract from kola nuts (`dope' is a southernism in the United States) Co. +4.51
Union Carbide Union Carbide Corporation (Union Carbide) is one of the oldest chemical and polymers companies in the United States, and currently has more than 3,800 employees. +3.73
General Electric +3.28
Allied Signal Inc. +2.55
Intl. Paper Co. +2.20
General Motors +2.16
Eastman Kodak +2.16
Chevron Corp. +2.11
Philip Morris Co. +2.11
Goodyear Tire +1.53
Exxon Corp. +1.43
Du Pont Du Pont (dpŏnt), family notable in U.S. industrial history. The Du Pont family's importance began when Eleuthère Irénée Du Pont established a gunpowder mill on the -1.52
Travelers Group -2.39
(x) Results given in percentages
SOURCE: Daily News research, Bloomberg News
BOX: DISNEY AND THE DOW (see text)