With summer just around the corner and the kids likely champing at the bit to hit a theme park during their summer vacations, who’s got the edge this season? Brandon Nispel, KeyBanc analyst, took a look at the field and compared Disney (NYSE:DIS) to Universal theme parks — which are owned by Comcast (NASDAQ:CMCSA). The winner? It’s looking like Disney’s got the edge, but it didn’t mean much to shareholders, as Disney shares dropped fractionally in the closing minutes of Thursday’s trading.
Nispel notes that Disney has the edge for one big reason: its sheer range. With several Disney theme parks located around the world, modest declines at any one of them could be absorbed by stable patronage or even small gains elsewhere. Universal parks, meanwhile, are looking at some difficult comparisons to last year. This is due to an overall deceleration as household budgets get crimped in the face of ongoing inflation and concerns about potential job losses.
Nispel noted that the weather was a factor in California parks, as Disneyland’s attendance was up just 12% from the previous month, while Walt Disney World in Florida saw a 15% rise from the same time. Universal, however, saw a 12% decline from March 2023 but a 37% gain over February. Universal Studios Hollywood’s losses drove much of the problem.
It’s worth noting that Brandon Nispel is a four-star analyst with a 53% success rate.
If You Build It, Will They Come?
Both Universal and Disney are looking at new attractions in the short term. Last year’s opening of Super Nintendo World is proving to be a tough comparison for Universal this year, and Universal’s Epic Universe will fire up in 2025.
Meanwhile, Disney just cleared a new expansion project with the Anaheim city council to use currently existing parking lots for new attraction space. However, both will have a difficult battle fighting for customers: price tags. Universal will have the edge here; Mouse Hacking estimates that a family of three can vacation for a week at Universal for between $3,145 and $6,718. Meanwhile, the Disney equivalent for that same family of three runs between $3,671 and $8,893. It’s a good opportunity for Universal to promote a bargain.
What Is the Price Target for DIS Stock?
Overall, analysts have a Strong Buy consensus rating on DIS stock based on 22 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 14.68% rally in its share price over the past year, the average DIS stock price target of $127.51 per share implies 13.36% upside potential.
