It’s time to get off the sidelines when it comes to Walt Disney , according to Redburn Atlantic. The investment firm upgraded shares of the entertainment giant to buy and hiked its price target to $147 from $100. The updated forecast signals 32% upside for the stock. Shares of Disney ended 2024 with a 23% gain. The stock ticked slightly higher in premarket trading after the upgrade. DIS 1Y mountain DIS 1Y chart Analyst Hamilton Faber thinks the company is approaching a major inflection point. With Disney’s structural issues waning, he eventually expects the stock to trade at a 10% premium to the S & P 500 . “After years of cord-cutting pressures, Disney is finally at a point where streaming profit growth will more than offset linear TV declines,” he wrote. “This is an important moment, signaling the end of a structural headwind that has curtailed Disney share price appreciation to just 20% over the past ten years versus the S & P 500’s 190%.” As a catalyst for the company’s changing fortunes, Faber pointed to a rebound in content performance. Titles such as “Deadpool & Wolverine” and “Inside Out 2” performed well at the box office. Management’s focus on streaming technology has also assuaged Faber’s confidence in Disney’s potential streaming growth. Faber added that the company’s direct-to-consumer ESPN offering could reach 21 million subscribers by the end of 2028, with minimal incremental costs. On top of that, Disney’s three-year guidance should boost investor confidence the analyst said. “Management has guided to high-single-digit EPS growth in FY25 with double-digit growth in each of in the following two years,” he wrote. “We doubt management would have issued such a long-term outlook without a fair degree of confidence. We believe the outlook is based on (1) fading structural issues, (2) longer-term growth at Parks and (3) streaming growth.” Analysts are generally bullish on the stock. LSEG data shows that 24 of 35 who cover the media giant rate it as a buy or strong buy. The average price target points to 11% upside.
Redburn Atlantic upgrades Disney, calls for more than 30% upside ahead