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Disney Parks Poised to Provide Persisting Profit
Stock Analysis & Ideas

Disney Parks Poised to Provide Persisting Profit

It is in the utmost interest of companies to have diverse revenue streams. A company that could fare well during both pandemic and post-pandemic times is impressive, and commands a strong position with its shareholders. The Walt Disney Company (DIS) has been successful in demonstrating its varied paths to generating income. Its Disney+ video streaming service helped the stock push through pandemic woes, and now its parks segment is poised to benefit from eventual reduced restrictions. (See Walt Disney Company stock charts on TipRanks)  

Explaining this dynamic is Vijay Jayant of Evercore ISI, who wrote that since the start of 2020, Disney+ added 110 million subscribers, throughout the pandemic. With the ramp-up of vaccinations against COVID-19, DIS saw its U.S. theme parks turn profitable for the first time in a year and a half. This he called a “clear turning point” for the company.  

Basing his opinion on this positive outlook, Jayant assigned a Buy rating for the stock and declared a price target of $210. This target represents a possible 12-month upside of 20.18%.  

The four-star analyst noted that Disney+ beat Q2 Wall Street consensus subscriber estimates by 50%, driven by increases in content and higher user engagement rates. Furthermore, Disney introduced price increases, which Jayant argued had been “digested” by consumers.  

After these large gains, Jayant remains bullish on Disney+, asserting his confidence that the streaming service will be able to exceed its long-term subscriber targets, going forward.  

Jayant stated that DIS has “solidified itself as a recovery play (in Parks) and a structural COVID winner.” The built-up demand for its theme parks will surely provide ample revenue as soon as restrictions are loosened. Additionally, the advances in automation and cost management in Parks management are expected to do their part in pushing margins beyond their pre-pandemic levels.  

On TipRanks, DIS has an analyst rating consensus of Strong Buy, based on 14 Buy and 3 Hold ratings. The average Walt Disney Company price target is $215.38, suggesting a possible 12-month upside of 23.26%. DIS closed trading Wednesday at a price of $174.74 per share.  

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. 

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