The first doses of Pfizer's COVID-19 vaccine are now being administered across the country, marking the beginning of an effort to put an end to the pandemic that has ravaged the U.S. economy since March. The Dow Jones Industrial Average (^DJI -0.98%) was up 0.74% at 10:45 a.m. EST Monday as the vaccine rollout began. The Dow may also be getting a boost from the planned release of a $908 billion stimulus bill from a bipartisan group of U.S. lawmakers slated for Monday afternoon.
Walt Disney (DIS -1.01%) didn't contribute to the Dow's gain, with shares of the entertainment juggernaut slumping after an analyst downgraded the stock. Meanwhile, shares of 3M (MMM -0.66%) rose after the company reported solid sales growth for November.
Image source: Getty Images.
Analyst cools on Disney stock
Shares of Disney have soared over the past couple of months despite severe headwinds in its parks and films businesses due to the pandemic. A big chunk of that gain came last week when the company greatly increased its long-term target for streaming subscribers. Disney now expects to have between 300 million and 350 million subscribers across all its streaming services by 2024, with Disney+ expected to account for between 230 million and 260 million subscribers by itself.
Disney received a lot of analyst praise leading up to the Investor Day event where the company raised these streaming targets. On Monday, one analyst hit the brakes. BMO Capital Markets analyst Daniel Salmon downgraded Disney stock to start the week, moving his rating from outperform to market perform while raising his price target from $165 to $185.
Salmon is concerned about valuation, which has become a lot richer following the recent rally. Based on trailing-12-month figures, Disney stock now trades for over 37 times earnings. That's up from typical values in the teens for much of the past few years.
The situation looks even worse when considering the average analyst estimate for the current fiscal year. Analysts expect Disney to report EPS of just $1.62 for fiscal 2021, a number that will be beaten down by continued park closures and uncertainty surrounding the movie theater industry. Disney stock currently trades for over 100 times that earnings estimate.
Salmon is putting a lot of value on Disney's direct-to-consumer business, valuing the rapidly growing segment at between $100 and $120 per share. Salmon values Disney's struggling core business at just $65 per share.
Shares of Disney couldn't quite shake off this analyst downgrade on Monday, slumping about 1% by late morning. The stock remains up about 20% since the start of the year.
3M reports November sales growth
Industrial conglomerate 3M reported an 8% rise in sales for the month of November. Total sales came in at $2.9 billion. Excluding divestitures and foreign currency translation effects, sales were up 7%.
Here's how 3M's segments stacked up:
|
Segment |
Sales Growth |
Organic Local-Currency Sales Growth |
|---|---|---|
|
Safety and industrial |
16% |
14% |
|
Consumer |
16% |
15% |
|
Health care |
5% |
7% |
|
Transportation and electronics |
3% |
1% |
Data source: 3M.
Sales grew across all of 3M's geographic regions, with solid 11% organic local-currency sales growth in the Americas. While organic local-currency sales were flat in the Asia Pacific region, sales were up 13% in China.
The company predicts that it will generate revenue between $8.2 billion and $8.4 billion for the fourth quarter, although 3M acknowledged that "significant macroeconomic uncertainty" remains. The company produced revenue of $8.1 billion in the fourth quarter of 2019.
3M's sales update was enough to push the stock modestly higher on Monday. Shares of 3M were up about 0.9% by late morning.
