Analyst Jessica Reif Ehrlich from Bank of America Securities maintained a Buy rating on Walt Disney (DIS – Research Report) and keeping the price target at $140.00.
Jessica Reif Ehrlich’s rating is based on Disney’s strong financial performance in the second fiscal quarter, where the company exceeded expectations in revenue and operating income. The total revenue grew by 7% to $23.6 billion, surpassing the estimated $23.4 billion, and operating income increased by 15% to $4.44 billion, above the forecasted $4.13 billion. Additionally, the adjusted earnings per share were significantly higher than anticipated, reaching $1.45 compared to the expected $1.25.
Moreover, Disney’s Free Cash Flow was notably higher than expected, and the company raised its fiscal year 2025 outlook for adjusted EPS growth to 16%, which is promising given the current economic uncertainties. The Entertainment and Experiences segments performed better than expected, with increased operating income driven by factors such as higher subscription revenue and growth in domestic parks. The Sports segment also showed positive revenue growth, contributing to the overall positive outlook. These factors, along with anticipated profitability in direct-to-consumer services and a strong film slate, support the Buy rating and a price objective of $140.
In another report released on May 1, Goldman Sachs also maintained a Buy rating on the stock with a $140.00 price target.