Disney Analysts Bullish After Q1 Earnings: ‘The Magic’s Back’
Disney Analysts are feeling optimistic after the company reported its first-quarter financial results. While Disney exceeded analyst estimates for earnings per share, it fell slightly short on revenue. Nevertheless, Wall Street analysts are breaking down the results and sharing their thoughts on what lies ahead for the entertainment giant.
Bank of America analyst Jessica Reif Ehrlich has a strong Buy rating on Disney and raised the price target from $110 to $130. She believes that Disney’s first-quarter results demonstrate that the company is bringing the magic back. Ehrlich is encouraged by Disney’s cost reductions and expects the company to meet or exceed its $7.5 billion annualized savings target. She also highlighted Disney’s increased dividend payout and plans for its first share buyback since 2018. Ehrlich views Disney’s premiere assets as best-in-class.
Macquarie analyst Tim Nollen, on the other hand, has a Neutral rating on Disney but raised the price target from $94 to $104. Nollen believes that Disney’s trajectory might be improving and that the company is heading into a proxy battle with greater strength. He points out Disney’s joint venture for a sports streaming platform with Fox Corporation and Warner Bros. Discovery, as well as the planned launch of an ESPN standalone streaming platform in August 2025. Nollen also notes that Disney is refilling its content pipeline with new films and exclusive streaming content.
Needham analyst Laura Martin upgraded Disney from Hold to Buy and initiated a price target of $120. Martin declares that the magic’s back at Disney and highlights the company’s cost savings, expected breakeven guidance for its direct-to-consumer business, new sports joint venture, higher dividend payout, $1.5 billion investment in Epic Games, $3 billion share buyback, and the exclusive streaming of Taylor Swift’s concert film. She emphasizes the positive impact of Disney CEO Bob Iger’s actions since his return to the company.
KeyBanc analyst Brandon Nispel maintains a Sector Weight rating on Disney but does not provide a price target. Nispel acknowledges Disney’s positive guidance on long-term double-digit margins for its direct-to-consumer segment and the return to positive net adds for Disney+. However, he cautions that the company still faces challenges including declines at linear networks, difficult comparable sales for domestic parks, underperforming movies at the box office, and the timing of direct-to-consumer profitability. Nispel believes that while Disney’s major issues are not completely fixed, the stock is fairly valued.
Overall, Disney Analysts are mostly bullish following the first-quarter earnings report, with positive sentiments regarding the company’s cost savings, streaming initiatives, increased dividend payout, and content pipeline. While there are some concerns regarding potential headwinds, the general consensus is that Disney is on the right track and making strategic moves to drive growth and profitability.
Disney shares have experienced an 11.82% increase, reaching $110.86 on Thursday.
Disclaimer: The above article is for informational purposes only and should not be considered as financial advice. Please consult with a professional advisor before making any investment decisions.
