Jefferies boosted Disney to Buy with a $144 target, highlighting potential growth from streaming, parks, and cruises, including an ESPN standalone service and Epic Universe launch.
The Walt Disney Company's streaming businesses and growing cruiseline operations can help stoke new growth for the Mouse House, so says analysts at New York investment bank Jefferies.
The bank's analysts on Monday turned bullish on Disney, moving to 'Buy' from 'Hold' with a new target of $144 (the stock trades at $127 in New York currently), with multiple value catalysts pinpointed.
First, Jefferies reckons there's minimal risk of slowdown in Disney's theme park business, despite the challenge from noisy neighbour Universal, which this year launched Epic Universe, a high-profile new park in Orlando, ramping up competion for Disney World.
At the same time, Jefferies projects the Disney Cruise business will soon hit $1 billion of revenue (it predicts this will happen in 2026), thanks to an aggressive investment in growth.
More broadly, Jefferies sees the possibility of a broader rebound in travel and leisure spending to boost Disney's 'Experiences' unit.
Elsewhere, in Disney's content business, Jefferies reckons the 'direct-to-consumer' (i.e. streaming apps like Disney+, Hulu and ESPN) can drive a sharp upturn in growth - from a flat growth rate last year, potentially up to 13% by 2028. An upcoming launch of ESPN’s standalone service, and potential blockbuster movies like Zootopia 2 and Avatar 3 add can help Disney on this score.
