The Mouse is regaining its mojo on Wall Street.
Disney stock, which hit a 2024 bottom of $83.91 over the summer, has roared back to life and is seeing a second straight day of significant gains after an upbeat earnings report Thursday morning.
Shares were up nearly 4% as of mid-day Friday, reaching a 6-month high north of $113. They have gained 24% in 2024 to date.
While there are some reasons for concern (the ongoing meltdown of linear TV assets, the ramp-up in sports rights costs, the challenge of picking a suitable successor to CEO Bob Iger), the positives are manifold. The streaming operation, after years of hefty losses, is resoundingly profitable, with a target of $1 billion in profit in fiscal 2025. Two billion-dollar-grossing movies, Deadpool & Wolverine and Inside Out 2, have punctuated the film studio’s rebound, with animation in particular back in action as Moana 2 looms as a holiday juggernaut. The Parks and Experiences division has also shown steady progress and remains a powerful revenue engine.
Wall Street analysts have registered the company’s improving fortunes.
In a note to clients Friday morning, BofA Securities media analyst Jessica Reif Ehrlich reiterated her “buy” rating on Disney shares and upped her 12-month price target to $140 from $120. While she described the company’s quarterly results as “mixed,” she said the upswing in the shares can be attributed to Disney’s outlook for the next few years. The company said it expects adjusted earnings per share growth in the high single-digits in fiscal 2025, with double-digit gains expected in fiscal 2026 and ’27.
That guidance, she wrote, “indicates confidence in the business longer term coupled with improving trends in the Experiences segment.”
Michael Morris of Guggeinheim also raised his price target by $20, boosting it to $130. He maintains a “buy” rating on the stock and called out the company’s guidance. In a note to clients, he wrote that it was “ahead of consensus and sets baseline for consolidated performance across multiple business segments with different drivers.”
He wrote in a note that the mid-2025 launch of ESPN’s flagship streaming service, “consolidated entertainment growth, parks profit expansion and succession clarity” are key elements of his positive thesis.
