Analysts walked away from Disney’s first-quarter results more bullish on the stock. Disney’s first-quarter earnings and revenue beat expectations, but the stock has lost 2.4% on Wednesday on concerns of declining subscribers to the company’s Disney+ flagship service. The streaming service saw a 1% decline in subscribers during the quarterly period, and the company said on Wednesday that it could see another “modest decline” in the second quarter. Despite the decline and tepid guidance, Wall Street’s biggest research shops remain optimistic that Disney can boost its earnings growth and are watching if the company can show accelerating parks revenue and subscriber trends. here’s what they had to say: Morgan Stanley reiterates overweight rating, raises price target to $130 Analyst Benjamin Swinburne upped his price target on Disney by $5 to $130, which implies the stock could gain 17.6%. He called Disney a “winter soldier” and said the company should be in a strong position to increase its adjusted EPS guidance later this year. “Our bullish view reflects confidence in Disney’s ability to accelerate Experiences growth and deliver meaningful earnings and earnings upside from streaming in FY25, combined with a still modest multiple. The F1Q results increase our conviction.” Goldman Sachs keeps buy rating and $140 price target Analyst Michael Ng said he gained confidence in his rating and above-consensus earnings per share forecasts on Disney after the media giant’s results. “We believe the company is a high quality EPS compounder supported by 1) continued progression to scaled long term DTC profitability made possible by wholesale arrangements, bundled offerings, password sharing restrictions and other initiatives; 2) studio performance improvement (from a period of under earning) enabled by cost rationalization and organizational restructuring; 3) effective sports rights cost mitigation and cord-cutting headwind management via ESPN DTC flagship, live rights sub-licensing, portfolio curation, and corporate actions; and 4) robust theme park growth enabled by industry tailwinds and a $60bn investment over the next 10-years.” Wolfe Research maintains peer perform rating Analyst Peter Supino said Disney’s relative P/E multiple appears stuck at a discount. It’s underperformance could be an opportunity, however, as the analyst believes that concerns around declining engagement at Hulu and Disney+ could be overrated as he said second-quarter subscriber trends appear better than headline guidance suggests. “Bulls see conservatism, bears see caution. With profit growth strong while park traffic and DTC engagement are weak, the P/E discount to SPX should persist … At today’s lower price and with enhanced confidence in 2025 guidance, we lean more positively on DIS. With stagnant volumes across the company, the P/E discount may be stubborn.” Barclays keeps overweight rating and $125 price target Analyst Kannan Venkateshwar thinks investors are still in the early stages of a “positive earnings revision cycle” for Disney. He cited the company’s theme park growth upside, streaming profitability turnaround and potential content cost cuts in sports as some factors that could lead to upside in the upcoming years. Venkateshwar’s price target suggests roughly 13.1% potential upside. “Disney stock performance post earnings yesterday was surprising given that the quarter was broadly better than expected, and guidance didn’t change vs outlook provided last quarter … We believe the reaction post the quarter was unjustified and we continue to see Disney as one of the most attractive investments in our coverage universe.”
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