The Walt Disney Company (DIS) stock rallied about 11% on Wednesday, as the entertainment giant beat the Street’s Q2 FY25 expectations, backed by strong subscriber growth for its Disney+ streaming platform. Several analysts praised the company’s upbeat performance. Barclays analyst Kannan Venkateshwar reaffirmed a Buy rating on DIS stock and raised the price target to $120 from $115, saying that Disney’s results for the first half and guidance for the rest of the year should help investors have “more conviction around growth trajectory.”
The 5-star analyst believes that aside from the largest potential gains from its streaming service, Disney has the least structural risks compared to other media companies. He added that despite its macro exposure, DIS stock continues to be one of the most attractive investments in Barclays’ coverage.
Analysts Applaud Disney’s Q2 Results and Outlook
Likewise, Bank of America analyst Jessica Reif Ehrlich noted that the upgrade to Disney’s earnings growth outlook is encouraging, given the recent macro challenges. Ehrlich has a Buy rating on DIS stock with a price target of $140. The 4-star analyst highlighted near-term catalysts for Disney stock, including profitability inflection in DTC (direct-to-consumer), reacceleration in the Parks business, and a robust film slate, which drives other businesses like DTC, Parks, and Consumer Products.
Further, Goldman Sachs analyst Michael Ng reaffirmed a Buy rating on Disney stock with a price target of $140 and emphasized the robust performance of the Experiences division, fueled by better-than-anticipated domestic theme park attendance. The 4-star analyst is bullish on Disney’s profitability prospects, improved studio costs, and theme park growth.
Ng believes that Disney is a “high quality EPS compounder,” thanks to enhanced long-term DTC profitability due to wholesale arrangements, bundled offerings, password sharing restrictions, and other initiatives. He also noted studio performance improvement, backed by cost rationalization and organizational restructuring.
Meanwhile, TD Cowen analyst Doug Creutz noted that Disney’s Q2 FY25 EBIT (earnings before interest and taxes) “comfortably” surpassed his firm’s and consensus estimates and that the company’s improved full-year outlook reflects the upside in the first two fiscal quarters. He contends that the Q2 film underperformance was not problematic for overall results, partly due to the double-digit growth in content licensing. However, the 5-star analyst reiterated a Hold rating on the stock, as he thinks that Disney’s improving results are balanced by risks related to the macro environment and the upcoming CEO transition.
Is Disney Stock a Buy, Sell, or Hold?
Disney stock scores Wall Street’s Strong Buy consensus rating, reflecting confidence in the company’s long-term growth potential. More analysts might reaffirm/revise their price targets in reaction to the Q2 results and updated outlook.
Despite yesterday’s rally, Disney stock is still down 8.3% year-to-date.
