UBS raises Disney stock price target to $120, maintains buy rating

On Thursday, UBS analysts adjusted their outlook on Walt Disney Company (NYSE:DIS) shares, raising the price target from the previous $105.00 to $120.00 while reaffirming a Buy rating on the stock. The entertainment giant, with a market capitalization of $193 billion, is currently trading slightly below its InvestingPro Fair Value, suggesting potential upside opportunity. According to InvestingPro data, the stock has shown significant momentum with a 12.4% return over the past week. The decision followed Disney’s announcement of robust financial results for the second fiscal quarter, which were propelled by stronger performance in the Experiences segment, improvements in Direct-to-Consumer (DTC) services, and sustained profits in linear media.

Disney’s total revenue saw a year-over-year increase of 7%, compared to the 5% growth in the first fiscal quarter. The company’s trailing twelve-month revenue stands at $92.5 billion, with an EBITDA of $18.45 billion. Segment operating income also rose by 15%, although this was a decrease from the 31% surge reported in the previous quarter. Notably, InvestingPro analysis shows the company is trading at an attractive PEG ratio of 0.38, indicating a favorable valuation relative to its growth prospects. The company’s adjusted earnings per share (EPS) have climbed by 32% year-to-date. Management has now updated its forecast for EPS growth to 16%, expecting it to reach $5.75 in fiscal year 2025. This is an upward revision from the previously anticipated high single-digit growth. Additionally, they project double-digit growth to continue through fiscal year 2027.

The report also highlighted that despite a dynamic macroeconomic environment, Disney has not yet experienced significant impacts. Park bookings for the second half of the year are notably higher than the same period last year, and advertising revenue in sports remains robust. Management anticipates more than 3% growth in total advertising revenue for fiscal year 2025, which is an improvement over the previous forecast of 3% and a rebound from flat growth in fiscal year 2024.

UBS analysts now expect Disney to report $5.80 in EPS for fiscal year 2025, with a projected 13% growth in fiscal year 2026 to $6.53. This outlook is more optimistic than the prior estimates of $5.51 and $6.06, respectively. With an overall Financial Health score of "GOOD" from InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ top stocks, investors can access detailed insights into Disney’s valuation, growth prospects, and financial stability metrics to make more informed investment decisions. The projected growth is believed to be driven by increasing profits from DTC offerings, a resurgence in the sports segment, and steady trends in the parks division. Additionally, the introduction of new cruise ships and a more adaptable cost structure for the Parks segment, which can adjust in the face of economic downturns, are expected to contribute to the positive trajectory.

In other recent news, the Walt Disney Company reported impressive financial results for the second quarter of 2025, surpassing analyst expectations. The company’s adjusted earnings per share (EPS) reached $1.45, exceeding the forecasted $1.21, while revenue hit $23.62 billion, surpassing the expected $23.13 billion. Disney’s strong performance was driven by growth in its experiences segment and increased advertising revenue. Analysts at TD Cowen maintained a Hold rating on Disney stock, acknowledging the company’s earnings before interest and taxes (EBIT) exceeded expectations, and they revised Disney’s fiscal year 2025 revenue and operating income forecasts upward. Bernstein analysts also maintained an Outperform rating with a price target of $120, highlighting Disney’s raised EPS guidance and positive outlook for its direct-to-consumer segment. Jefferies increased Disney’s price target to $100, noting the company’s strong quarterly performance and positive trends in its streaming service and theme parks. Disney’s recent developments reflect its strategic investments in content and global expansion, including a new theme park in Abu Dhabi, which aim to bolster the company’s growth trajectory.

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