Disney Q4 Report Had 'A Lot To Like': Analyst Calls It A 'High-Quality' Profit Growth Performer

The Walt Disney Company DIS provided a look at multi-year guidance, which surprised analysts and resulted in price targets being raised after the company’s fourth-quarter financial results.

The Disney Analysts:

• Guggenheim analyst Michael Morris maintained a Buy rating on Disney and raised the price target from $110 to $130.
• Macquarie analyst Tim Nollen maintained a Neutral rating and raised the price target from $91 to $110.
• Goldman Sachs analyst Michael Ng maintained a Buy rating and raised the price target from $125 to $135.

Read Also: Disney Q4 Earnings Preview: Disney+ Profitability, Deadpool Box Office Success Top Items To Watch

Guggenheim on DIS: Multi-year guidance provided by Disney could help instill confidence in a path for long-term growth, Morris said in a new investor note.

The analyst said fourth-quarter results saw direct-to-consumer profit come in ahead of estimates with linear networks lagging.

"Key incremental item is the detailed, multi-year financial guidance, which includes FY25 EPS growth ahead of consensus and acceleration to double-digit growth in 2026 and 2027," Morris said.

The analyst said entertainment, DTC and studio growth are expected to offset the continued pressure on linear networks.

"We see ESPN Flagship launch, consolidated entertainment growth, parks profit expansion and succession clarity as core components of the BUY thesis into 2025."

Macquarie on DIS: There was a lot to like in Disney's fourth-quarter results and guidance, Nollen said in a new investor note.

"Disney's F4Q report contained positive and detailed guidance for FY25-27 that speak to its long-term potential," Nollen said.

DTC profitability, the success of big blockbuster films, and advertising stability were highlights for the analyst in the fourth quarter.

The analyst also said Disney's guidance was richer than usual.

While the quarter was strong, the analyst remains Neutral, given near-term risks and concerns about the stock’s valuation, with shares trading at 20x PE and 12x FY25 EV/EBITDA.

Nollen is concerned that the ESPN DTC Flagship launch could include trade-offs with linear subscribers.

"Disney is the one traditional media company that we can be confident will transition successfully to streaming. The positive detailed guidance is encouraging, and sentiment could carry the stock."

Goldman Sachs on DIS: Theme park recovery, DTC strength and the multi-year outlook were highlights in the fourth quarter for Ng.

"DIS provided a 3-year outlook that exceeded even our above-consensus expectations," Ng said.

The analyst said the guidance for fiscal 2025, 2026 and 2027 was better than expected and shows strength across several key segments.

"DIS expects its F2025 results to reflect progression in profitably scaling its streaming businesses with attractive margins and continued investments to grow its Experiences business."

The analyst is watching the launch of ESPN Flagship, upcoming movies like "Moana 2" and "Mufasa,” the company's upcoming theme park expansions and new cruise ships for future growth.

"We are Buy-rated on DIS as we believe the company is a high-quality EPS compounder."

DIS Price Action: Disney stock is up 3.6% to $113.07 on Friday versus a 52-week trading range of $83.91 to $123.74. Disney stock is up 25% year-to-date in 2024.

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