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On Tuesday, Loop Capital adjusted its financial outlook for Walt Disney Company (NYSE:DIS) shares, reducing the price target to $120 from the previous $130, yet maintaining a Buy rating on the entertainment giant’s stock. According to InvestingPro data, Disney, with its substantial $163 billion market capitalization, is currently trading at $90.16, suggesting potential upside based on analyst targets ranging from $79 to $147. The revision comes as analyst Alan Gould provided an in-depth analysis of Disney’s domestic theme park business and revised the Experiences division’s estimates to fall below the consensus and slightly under the low end of the company’s own guidance.
Gould cited lower consumer confidence and the increased likelihood of a recession as factors that could lead to a decrease in advanced bookings for Disney’s theme parks. Additionally, Loop Capital acknowledged the potential impact of Comcast (NASDAQ:CMCSA)’s new theme park, Epic Universe, set to open on May 22, which has been receiving outstanding reviews and could pose competition for Disney’s park attendance.
The firm also noted a downward adjustment to Disney’s March quarter film revenue forecast, attributing it to the underwhelming performance of the "Snow White" movie. Despite this setback, Gould remains optimistic about Disney’s future, highlighting the company’s strong upcoming film lineup, which includes new entries in the "Avatar" and "Avengers" franchises over the next 15 months.
Disney’s stock price adjustment reflects Loop Capital’s cautious stance on the immediate challenges facing the company, while the Buy rating suggests confidence in Disney’s long-term prospects. The firm’s analysis points to external economic factors and competitive pressures as short-term headwinds, with an anticipation of recovery driven by a robust pipeline of content. InvestingPro subscribers can access additional insights through comprehensive Pro Research Reports, which reveal 6 more exclusive ProTips and detailed financial analysis for informed investment decisions.
In other recent news, FuboTV (NYSE:FUBO) is under scrutiny as the U.S. Department of Justice investigates Disney’s acquisition of a controlling stake in the company. The merger, which aims to combine Disney’s Hulu + Live TV service with FuboTV, would make it the second-largest online pay-TV provider in North America. The DOJ’s investigation raises concerns about potential market concentration in the sports streaming sector, adding uncertainty to the merger’s completion. Meanwhile, Disney is facing an inquiry from the Federal Communications Commission into its diversity practices, specifically questioning compliance with equal employment opportunity regulations. On the financial front, UBS has adjusted Disney’s stock price target to $105, maintaining a Buy rating, citing macroeconomic uncertainties. The firm anticipates a 4.2% year-over-year increase in Disney’s total revenues for the second fiscal quarter, driven by strong performance in the Parks division and sports advertising. Additionally, Bernstein analysts continue to support an Outperform rating for Disney, with a $120 price target, expecting margin expansion in the Direct-to-Consumer segment. Lastly, China plans to reduce the number of U.S. films it imports, which could impact the U.S. film industry, though the specific extent remains unclear.
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