Disney’s Growth Potential and Valuation Justify Buy Rating

Analyst Laurent Yoon of Bernstein maintained a Buy rating on Walt Disney (DIS – Research Report), boosting the price target to $125.00.

Laurent Yoon has given his Buy rating due to a combination of factors that highlight Disney’s potential for growth and profitability. One of the key reasons is the projected growth in Disney’s earnings per share (EPS), which is expected to increase from $3.66 in 2022 to $5.81 by 2025, reflecting a compound annual growth rate of 16%. This growth trajectory indicates a strong financial performance that could drive the stock’s value upward.
Additionally, Yoon points out that Disney’s sum-of-the-parts (SOTP) valuation suggests a potential share price of approximately $132. The Experiences segment, which includes Parks, is a significant contributor to this valuation, estimated to be worth $72-$86 per share. Despite challenges in other segments like Linear, which is in decline, the expanding margins in the Direct-to-Consumer (DTC) segment and the sustained profitability of Sports provide a balanced outlook. Yoon anticipates that these factors, combined with a flexible valuation approach, position Disney for potential upside, justifying the Buy rating.

In another report released yesterday, Loop Capital Markets also reiterated a Buy rating on the stock with a $130.00 price target.

Based on the recent corporate insider activity of 70 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DIS in relation to earlier this year.