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Investing.com - Guggenheim raised its price target on Walt Disney (NYSE:DIS) to $140.00 from $120.00 on Monday, while maintaining a Buy rating on the entertainment giant’s stock. The new target aligns with the broader analyst sentiment, as InvestingPro data shows analyst targets ranging from $79 to $148, with the stock currently trading near its 52-week high of $122.94.
The price target increase reflects Guggenheim’s refined outlook for Disney’s operating expenses at Linear Networks, which benefits from the Star India divestiture and ongoing cost efficiencies. The firm also noted better-than-forecast Sports advertising revenue, driven by growth in aggregate audience year-over-year for the seven-game NBA Finals series. This positive momentum is reflected in Disney’s impressive financial metrics, with the company generating $94.04 billion in revenue and $19.12 billion in EBITDA over the last twelve months.
Guggenheim adjusted its model to account for modestly lower theatrical revenue from the relative underperformance of recent films including "Elio" and "Thunderbolts." The firm also highlighted relatively resilient attendance and travel trends at Disney’s Experiences segment.
With Hulu now fully under Disney control, following a $439 million payment to Comcast (NASDAQ:CMCSA) due on or before July 24, Guggenheim views the company as well-positioned to pursue a unified direct-to-consumer strategy, including the upcoming launch of the ESPN service.
Guggenheim’s fiscal third-quarter total company segment operating income forecast now stands at $4.5 billion, up from $4.4 billion previously, lifting its full-year segment operating income projection to $17.7 billion from $17.6 billion, slightly ahead of the consensus estimate of $17.65 billion. InvestingPro analysis reveals 8 additional key insights about Disney’s financial health, which has earned a GREAT overall score, suggesting strong fundamental positioning. Get the complete analysis and detailed Pro Research Report, along with real-time metrics and valuation tools, with an InvestingPro subscription.
In other recent news, Walt Disney has been active with several significant developments. The company is set to acquire NBC Universal’s 33% stake in Hulu for $438.7 million, following a contractual appraisal process. This transaction, anticipated to close by July 2025, is part of Disney’s strategy to consolidate its control over Hulu. Additionally, Jefferies has upgraded Disney’s stock rating to Buy, raising the price target to $144, highlighting optimism in Disney’s parks and cruise segments and forecasting substantial revenue growth in the cruise business by 2026.
Guggenheim also raised its price target for Disney to $140, citing improved financial outlooks due to cost efficiencies and resilient attendance at Disney’s Experiences division. Meanwhile, ESPN, a Disney network, has entered into a strategic partnership with the Premier Lacrosse League, acquiring a minority stake and securing media rights. This move reflects ESPN’s commitment to expanding its sports offerings. Furthermore, Bernstein has increased its price target for Disney to $125, noting potential earnings growth and a positive outlook for various segments, including Parks and direct-to-consumer services. These developments indicate a period of strategic growth and investment for Disney.
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