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stock price Walt Disney (NYSE:DIS) It’s up nearly 25% year-to-date, but analysts at MoffettNathanson don’t think the rally is over yet. Last week, the company maintained its buy rating and raised its short-term price target for the stock from $120 to $125. This would represent an 11% increase from Disney’s current stock price of $112.75.
Despite Disney’s struggles, Moffett Nathanson analysts have become more enthusiastic about the company’s prospects following comments from CEO Bob Iger. morgan stanleytechnology conference.
Why Wall Street believes Disney has turned the corner
Iger returned as CEO more than a year ago with a promise to return Disney to profitable growth, and the latest earnings report showed significant progress toward achieving that goal. Iger said he is confident Disney’s streaming service, which reported a huge bottom line last year, will reach profitability by September, the end of fiscal 2024. Disney’s adjusted profit for the December quarter rose 23% from a year earlier as losses at its direct-to-consumer division narrowed.
Analysts at Moffett Nathanson also like the direction of Disney’s parks and experiences business. Iger said Park’s performance is strong and operating income should grow in the low to mid-teens range.
Reasons to buy Disney stock
Wall Street consensus expects Disney to report a 5.8% decline in total sales for the year, but earnings per share should rise 12.7% to $4.24.
The price/earnings ratio based on consensus estimates is 25 times, which is a reasonable level for a top brand like Disney. If Disney shows improved performance through fiscal 2025, as analysts expect, the stock could rise further. The stock is still down about 43% from its all-time high.
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John Ballard has no position in any stocks mentioned. The Motley Fool has a position in and recommends Walt Disney. The Motley Fool has a disclosure policy.
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