On Wednesday, Rosenblatt Securities adjusted its outlook on Walt Disney Co (NYSE:DIS) shares, reducing the stock price target to $130 from $137, while maintaining a Buy rating. The decision follows Disney's second-quarter fiscal year 2024 earnings report, which heightened concerns about the performance of the company's theme parks, leading to a 10% decline in the stock's value.
The firm's analyst commented on the factors influencing the decision, noting that if the economy remains stable, the current worries about the theme parks are expected to be temporary. The analyst anticipates that the trends will rebound, which would be beneficial for Disney, especially as the company's streaming services are showing improved performance.
The analyst further stated that in the event their positive outlook does not materialize, they expect activist investors to re-emerge. This could potentially put Disney in a position where a breakup of the company could be considered. Despite the reduction in the price target, the analyst emphasized the retention of the Buy rating for Disney's stock.
The adjustment in Disney's stock price target reflects Rosenblatt's response to the immediate financial performance and market reaction to the company's latest quarterly report. The firm's perspective suggests a belief in the resilience of Disney's business model, particularly with respect to its streaming service, despite the current challenges faced by the theme park segment.
Rosenblatt's revised stock price target of $130 represents a modest decrease of $7 from the previous target. The firm's continued endorsement of a Buy rating indicates an expectation of a potential upside for investors, based on the company's overall prospects and strategic position in the entertainment industry.
InvestingPro Insights
In light of Rosenblatt Securities' recent price target adjustment for Walt Disney Co (NYSE:DIS), InvestingPro data and tips provide additional context for investors considering the company's stock. The market cap for Disney stands at a robust $193.32 billion, reflecting its significant presence in the entertainment industry.
Despite a challenging quarter for theme parks, Disney's revenue growth over the last twelve months as of Q2 2024 has been positive at 2.55%, with a notable increase in EBITDA growth at 27.26%. These figures suggest underlying financial resilience.
An InvestingPro Tip points out that Disney is expected to be profitable this year, aligning with Rosenblatt's optimistic outlook for the company's streaming services and potential theme park rebound.
Moreover, Disney's large price uptick over the last six months of 25.13% indicates a strong market confidence, which could be a positive signal for investors. However, it's worth noting that 8 analysts have revised their earnings downwards for the upcoming period, which may warrant caution.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available on Disney, which could further inform investment decisions. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to these valuable insights.
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