Barclays upgrades Disney to Overweight after ‘narrative reset’

Barclays analyst Kannan Venkateshwar upgraded Disney to Overweight from Equal Weight with a price target of $135, up from $95. The recent “narrative reset” is likely to be followed by positive estimate revisions, which is still early in the cycle and should further support the stock’s valuation, the analyst tells investors in a research note. The firm says the “incessant Disney-related news flow” ahead of the proxy vote has dominated investor considerations since last quarter’s earnings and should continue helping the stock in the near term. This process and announcements, including better than expected free cash flow and earnings guidance for fiscal 2024, has helped investors gain more confidence about Disney’s earnings estimates having bottomed, says Barclays. The firm believes there may still be some sources of “upside narrative surprises” such as ESPN’s streaming partnerships.