Intel stock spikes after report of possible US government stake
On Thursday, Bernstein analysts, led by Laurent Yoon, reiterated their Outperform rating on Walt Disney Company (NYSE:DIS) shares, maintaining a $120.00 price target. Currently trading at $91.44 with a market capitalization of $165.3 billion, Disney's stock appears undervalued according to InvestingPro analysis. The firm's assessment acknowledges the multifaceted nature of Disney's operations, which include Linear/Sports, Parks, and Streaming segments, each presenting unique challenges and opportunities.
Bernstein's analysis pointed to Disney's Parks division as particularly susceptible to the economic climate, noting heightened macroeconomic fears that could impact consumer spending. The company generated $92.5 billion in revenue over the last twelve months, with an EBITDA of $18.45 billion. Despite these concerns, the firm highlighted Disney's guidance for strong summer bookings, though it recognized that the forecast may now seem outdated in light of potential recessionary threats and growing anti-American product sentiment globally.
Looking at the mid-term horizon, Bernstein expects Disney to see margin expansion in its Direct-to-Consumer (DTC) segment and additional cruise ship capacity, projecting earnings per share (EPS) to exceed $6 by fiscal year 2026. With a notably low PEG ratio of 0.33, the stock appears attractively valued relative to its growth prospects. The firm suggested that, based on the anticipated EPS for FY26, the current stock price could represent more than a 30% upside.
For the longer term, Bernstein analysts believe that Disney has the potential to achieve an EPS greater than $9 by 2030, indicating that the stock currently trades at approximately 10 times the estimated 2030 EPS. Despite acknowledging the near-term risks associated with macroeconomic factors, Bernstein remains confident in Disney's performance and will continue to monitor the broader macroeconomic environment for any changes that could affect their price target. For deeper insights into Disney's valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro, which offers expert analysis of 1,400+ top stocks.
In other recent news, Walt Disney has been under scrutiny as the Federal Communications Commission ( FCC (BME:FCC)) launched an investigation into the company's diversity practices, particularly focusing on potential violations of U.S. equal employment opportunity regulations. Meanwhile, analysts from BofA Securities and Goldman Sachs have both maintained a Buy rating on Disney stock, each setting a price target of $140.00. BofA analysts expect sequential improvement in Disney's operating income, particularly from the Experiences segment, driven by factors like the Paris Olympics and new cruise ship contributions. Similarly, Goldman Sachs projects Disney's second fiscal quarter of 2025 to achieve an EPS of $1.18, with revenues estimated at $23.1 billion, aligning closely with consensus figures.
Additionally, Disney's annual shareholder meeting concluded with the re-election of all board members and the ratification of PricewaterhouseCoopers LLP as the company's independent auditors for fiscal 2025. Shareholder proposals, including those related to climate risks and corporate equality, were defeated. The company's advertising sector remains strong, particularly in sports, although streaming services face challenges due to market saturation. Despite these hurdles, Disney is anticipated to see growth in direct-to-consumer average revenue per user, supported by strategic pricing and bundling strategies.
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