The powerful entertainment company continues to get a thumbs-up from a top U.S. bank.
As volatile as the entertainment industry it stands on top of, Walt Disney (DIS -0.55%) has been quite the up-and-down stock so far in 2024. It seems there are just as many passionate believers in The House of Mouse as detractors who feel it’s not what it’s cracked up to be.
Analyst Philip Cusick of JPMorgan Chase tilts more toward the former category. He recently reiterated his bullish take on Disney’s future. Is this view justified?
Potential 33% upside
Cusick has big expectations for Disney stock. His recommendation is overweight (read: buy) at a price target of $125 per share. If realized, that level would represent 33% growth from the most recent closing price of the stock.
The prognosticator’s latest research note, published late last week, detailed a set of adjustments to his estimates for the entertainment giant’s fundamentals. Although he reduced some of these due to one-off factors, such as a two-day shutdown at Shanghai Disneyland in China on account of a typhoon, he feels that certain corners of the business should do quite well. He cited a pair of Disney films, Deadpool & Wolverine and Alien: Romulus, as being particularly strong performers.
Cusick is also optimistic about the continued development of Disney’s video streaming platforms. He’s forecasting net subscriber additions of 3 million in the company’s current (fiscal fourth) quarter for its bedrock Disney+ service, and 900,000 for sibling streamer Hulu.
Mouse paws in many pies
If anything, I feel the JPMorgan Chase pundit may be underestimating Disney. As a shareholder I very much like the fact that the company is a top player in each of its major business ventures, from feature films to theme parks to branded consumer products. It therefore has many levers it can pull to produce growth and to more than compensate for underperforming units. I’m still bullish on Disney after a number of years owning it, and I see no reason to change my view today.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has positions in Walt Disney. The Motley Fool has positions in and recommends JPMorgan Chase and Walt Disney. The Motley Fool has a disclosure policy.