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Analyst cuts Disney citing 'unwarranted' stock rise

Pivotal Research Group analyst Brian Wieser on June 18 downgraded Walt Disney Co. to "sell" from "hold," citing a recent "unwarranted" stock rise.

Comcast Corp. recently asked 21st Century Fox Inc. stockholders to vote against Fox's merger agreement with Disney at a special meeting in order to evaluate its higher bid for the same properties. Comcast recently made an all-cash offer to acquire select Fox media assets for $35 per share in cash. Disney and Fox in late 2017 struck a $52.4 billion all-stock deal, with Fox shareholders set to receive 0.2745 Disney share for each Fox share they own.

Comcast has called its proposal "superior," saying it represents a premium of approximately 19% to the value of Disney’s offer.

The analyst noted that a bidding war would be negative financially for Disney, as would the loss of the transaction and any synergies the company expected to realize from it.

"The strategic position of the company would further be weakened relative to what would otherwise be possible without the transaction," Wieser said.

Wieser's price target on Disney stock is $93.