Disney stock takes a tumble

Analyst's report sets off sale

NEW YORK — Shares of Walt Disney Co. tumbled 4% Thursday on more than double the average volume as a leading Wall Street analyst shaved a dime off his earnings estimate for the entertainment blue chip.

Disney shares closed at $119.25 — down $4.94 on the day and considerably more from the yearlong high of $128.38 reached in late April when Disney not only reported a stock split and stronger-than-expected second-quarter earnings but sounded extremely bullish to the investment community while discussing its lineup of animated movies.

Pigskin price high

Goldman Sachs analyst Richard Simon cited two reasons Thursday for reducing his earnings estimate to $3.10 a share for full-year 1998: An “increasing concern” over the $4.4 billion that Disney’s ABC television network paid for its eight-year pact with the National Football League and “a more conservative look at the film business.”

Simon hastened to add that his revised take on Disney was “a near-term issue, not long-term.”

Disney traded as low as 74 in the past year before climbing to a level that now attaches an exceedingly rich multiple — by historical standards — of 127.15 times earnings to the stock.

“Given the combination of the stock run-up and the multiples being at record highs, and that we lowered numbers, leads us to believe there’s some price exposure,” Simon said.