Walt Disney's (NYSE: DIS) stock price has surged to its highest level in almost two years. But Needham & Company's equity research team thinks shares of the entertainment giant have more room to run.
Analyst Laura Martin just reiterated her firm's "buy" rating while boosting the price target for Disney shares from $120 to $145 per share. That comes as the stock surpassed the $120 per share level for the first time since August 2022. The new price target would represent a gain of 20% from the stock's current price.
Disney stock catalysts
The price target adjustment reflects updated projections for various segments of Disney's business, including Linear Networks, Content Sales/Licensing, Sports, and Experiences. Martin now sees higher operating income for fiscal years 2024 and 2025 leading to higher profitability.
Disney management has already told investors it thinks full-year fiscal 2024 earnings per share (EPS) will jump by at least 20% versus fiscal 2023, excluding certain items. Recent announcements have also begun to bring new momentum to the business.
Disney wants to leverage its popular ESPN channel with a skinny sports bundle media partnership that it recently announced. In another enticement for streaming service customers, the company also just added Hulu original content to its Disney+ offering. After beta testing the integration for several months, Joe Earley, Disney's president of direct-to-consumer for its entertainment segment, said, "content recommendations are going to be more relevant based on your usage."
Disney also just announced positive news for its already-thriving theme park segment. It said a settlement has ended a lawsuit with the state of Florida and the Central Florida Tourism Oversight District. Jeff Vahle, president of Walt Disney World, says the settlement will allow for "significant continued investment." That's good news for shareholders and is likely helping to increase investor interest in owning Disney shares.
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Howard Smith has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy.
