March 28 (Bloomberg) -- Walt Disney Co. is unlikely to reach an eight-year high of $37.50 in the next seven months, so investors can try to profit by trading options linked to the second-biggest U.S. media company, according to Citigroup Inc.

Investors should create and then sell Disney October $37.50 calls, or contracts to buy the stock at that price before the close of trading on Oct. 17, Citigroup derivatives strategist Mitchell Revsine and stock analyst Jason Bazinet wrote in a report yesterday. Bazinet is the only Wall Street analyst who recommends selling Burbank, California-based Disney's shares.

Revsine and Bazinet said slower U.S. consumer spending this year may depress Disney shares, which lost 1.2 percent to $31 in New York Stock Exchange composite trading today. Spending by American consumers, who have sustained the economy amid housing's worst downturn in a generation, rose in February at the slowest pace in more than a year, the Commerce Department said today. Disney last exceeded $37.50 in November 2000.

``Our rationale for recommending selling calls is based on the combination of the challenges the company will face this year due to a slowing economy combined with the fact that these trades will be unprofitable at option expiration only if Disney stock trades above the breakeven level,'' or $37.50 plus the cost of the October contracts, they wrote.

The calls fell 7.1 percent to 65 cents today. Investors who create and sell them will lose money only if Disney advances 21 percent before the Oct. 17 close.

Falling home prices, job losses and higher gasoline prices are driving down consumer spending, which accounts for more than two-thirds of the economy.

``If the retrenchment in household net worth occurs -- as it looks like it most certainly will -- there will be a strong propensity for consumers to dial back consumption fairly dramatically,'' Bazinet wrote in a March 26 report. ``And that, in turn, can't be good for a consumer-centric stock like Disney.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: March 28, 2008 16:36 EDT