economy
Disney shares are trading at a discount. Raymond James says it's time to buy
Disney is down 15% in the year to date as its parks face macroeconomic headwinds, but growth in its other businesses could boost shares, per Raymond James.
TL;DR
- Raymond James upgraded Disney to outperform with a $115 price target, signaling a 19% potential upside.
- The firm views current macroeconomic conditions and international park visitation challenges as an opportunity to invest at an attractive valuation.
- Disney shares have fallen 15% this year, partly due to expected declines in theme park attendance and competition from Universal Studios.
- Potential tailwinds for Disney include new cruise ships, a Frozen-themed expansion in Disneyland Paris, easier content comparables, and favorable sports rights costs.
- Disney's streaming business is projected to be the primary driver of operating income growth between fiscal years 2025 and 2028.
- Raymond James' analysis suggests Disney stock is historically cheap, even under severe bear case scenarios.
- The upgrade aligns with Wall Street consensus, with 27 out of 33 analysts covering Disney recommending a buy or strong buy.