Disney: Out On A Limb

It worked just as Walt Disney himself might have planned. Even before hitting the theaters, Tarzan was on its way to becoming a hit. The soundtrack was climbing the charts, while kids at Disneyland were climbing Tarzan's Treehouse. And in just 15 days, the Ape Man swung through the $100-million mark at the box office, all but assuring that Disney's 37th animated feature will be the best thing since The Lion King.

After a string of so-so performers, including The Hunchback of Notre Dame and Hercules, the Disney magic appears to be intact. But not on Wall Street. Just before the July 4 holiday, three analysts cut their estimates of the company's earnings for this year and next. And by July 7, Disney's stock was trading at $28.06, 8% below its price when Tarzan opened on June 18 and 5% below where it began 1999. Shares of Time Warner and News Corp., meanwhile, have soared by as much as 40%. Only six of the 21 analysts who follow Disney rate it an unqualified buy. A year ago, 17 of 18 did.