Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Jefferies upgraded Walt Disney (NYSE:DIS) stock rating from Hold to Buy and significantly raised its price target to $144.00 from $100.00. The stock, currently trading at $122.34 and near its 52-week high of $122.94, has demonstrated strong momentum with a 24.86% return over the past year. According to InvestingPro data, Disney maintains a "GREAT" financial health score, with analysts generally maintaining a Buy consensus.
The research firm cited four primary reasons for the upgrade, including limited risk of a second-half 2025 slowdown in Disney’s Parks segment despite the opening of competitor Universal’s Epic Universe and macroeconomic concerns. This optimism aligns with Disney’s robust revenue of $94.04 billion and EBITDA of $19.12 billion in the last twelve months.
Jefferies expressed optimism about Disney’s cruise business, projecting over $1 billion in revenue uplift for fiscal year 2026, while also forecasting continued margin expansion in the company’s direct-to-consumer segment from 0% in fiscal year 2024 to more than 13% by fiscal year 2028.
The firm views Disney’s content and sports slate favorably for the next six months, highlighting the ESPN direct-to-consumer launch, Zootopia 2, and Avatar 3 as key upcoming releases.
Jefferies noted that Disney has failed to grow operating income from fiscal year 2016 through fiscal year 2024 but believes "this dynamic is set to change," setting a price target that represents approximately 20 times fiscal year 2027 price-to-earnings ratio.
In other recent news, Walt Disney Company has been the focus of several notable developments. Guggenheim has raised its price target for Disney to $140, citing improved financial outlooks due to cost efficiencies and an increase in sports advertising revenue. Disney’s acquisition of the remaining 33% stake in Hulu from NBC Universal for $438.7 million is expected to complete by July 2025, following a detailed appraisal process. This acquisition is part of Disney’s strategy to integrate its streaming services more effectively, though it will impact the company’s net income attributable to noncontrolling interests.
Additionally, Bernstein has adjusted its price target for Disney to $125, highlighting expected earnings growth despite market complexities. Rosenblatt also increased its price target to $140, maintaining a Buy rating, with optimism around Disney’s diverse segments like experiences and ESPN streaming. Meanwhile, ESPN, a Disney network, has entered into a strategic partnership with the Premier Lacrosse League, acquiring media rights and a minority stake. These recent developments reflect Disney’s strategic maneuvers in both its traditional and digital media operations.
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