Deutsche Bank says Disney ‘s strong film slate makes it a good time for investors to revisit the stock. The bank reiterated its buy rating on Disney shares. Analyst Bryan Kraft raised his price target to $135 from $130 — implying shares could rally 34.6% — as the bank raises its short- and long-term earnings estimates for Disney. The analyst set his price target for the next 12 months, while many of his other growth projections in the note are based on Disney’s fiscal year. “We believe that now is an opportune time to revisit Disney as we believe a number of factors … are setting up the stock for appreciation in the back half of Disney’s fiscal year (ending Sept.),” Kraft wrote in a Tuesday note. Kraft said the company already has an “attractive setup” for its performance in the second half of its 2023 fiscal year. He eyes an inflection point for earnings growth in its fiscal third quarter from year-over-year margin improvement in its Entertainment segment, as well as continued revenue growth and margin expansion in its Parks & Consumer Products division. Disney’s strong roster of films could result in further gains for its Entertainment segment estimates this year, the analyst said. He highlighted “tentpole titles,” including “Guardians of the Galaxy Vol. 3,” “The Little Mermaid,” and “Indiana Jones and the Dial of Destiny.” These releases “have the potential to drive better profitability for the studio,” Kraft said. “Furthermore, F2023 is probably the first ‘normal’ year since the pandemic from a box office perspective with quality films generating large box offices YTD,” he continued. Kraft also anticipates additional growth in the fiscal 2023 year as Disney’s international parks and cruises businesses normalize and domestic parks’ growth continues at “a low double digit rate.” DIS YTD mountain Disney stock Shares of Disney are up 16% in 2023, but down more than 20% in the past 12 months. —CNBC’s Michael Bloom contributed to this report.
