Buy Disney as cruise and streaming businesses pick up steam, Jefferies says
Jefferies sees a rosy outlook ahead for Walt Disney . The bank upgraded shares of the entertainment giant to buy from hold. Analyst Ed Alter also lifted his price target to $144 per share from $100, implying nearly 18% upside from Friday’s close. Alter pointed to the launch of two new cruise ships in the first quarter of next year as a catalyst. Together, these ships could drive incremental revenue up between $1 billion to $1.5 billion. The analyst also applauded Disney’s direct-to-consumer business, especially the content and sports slate offered on its streaming platform, Disney+. Names such as “Moana 2” and “Lilo and Stitch” have been recent bright spots, while audiences can look forward to the upcoming releases of Avatar 3 and Zootopia 2 , alongside the launch of ESPN’s new streaming service. DIS YTD mountain DIS YTD chart “DIS is leaning more and more into its key differentiations of bundling, studio releases, and sports, where our data suggests this strategy is working, with DIS+ web visits growing 40%+ y/y in each of last 3 months,” he wrote. “Stronger user growth and content coupled with advertising (new AMZN partnership) should drive enhanced scale and margins.” While a tough macroeconomic backdrop and competition from the opening of Universal’s Epic Universe had previously been cause for concern, Alter said data on Disney’s trends show that traffic remains strong. In fact, Orlando traffic may actually pick up from the launch of Epic Universe alongside Disney’s two new cruise ships. “This creates a fundamentally stronger set-up for Exp; we est ~10% Op. Inc growth in FY26 and +8% in FY27 (vs. +3.6% in FY24),” he added. Shares rose more than 1% following the Jefferies upgrade. Year to date, the stock is up nearly 10%. Disney shares are well liked by analysts in general. LSEG data shows that 27 of 34 analysts covering the stock rate it a buy or strong buy.
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