After A Bearish Prediction Last May, Analyst Admits He Was Wrong About Disney

Lightshed Partners' Rich Greenfield acknowledged Friday that "we were wrong" in downgrading Walt Disney Co. DIS in May. He upgraded Disney's stock from Sell to Neutral.

The Thesis: Simply put, a shift towards a bearish stance on Disney's stock in May "has been dead wrong," Greenfield wrote in a report.

The thesis was based on how the market was under-appreciating the impact of the COVID-19 pandemic on Disney's 2020-2021 earnings. But shortly after the downgrade, Disney investors and the market started to look past COVID towards a more normalized world.

"Even 25 years into our analyst career, the market is still teaching us new lessons," he wrote. Disney's stock traded around the $115 area last May.

The analyst's prior bearish thesis was also based on the notion that the appointment of Bob Chapek as CEO was a mistake. But the new CEO "impressed us so far" by focusing on streaming video at the expense of legacy assets and earnings.

4 Things To Watch: Disney is well-positioned to "grow stronger" in the coming months amid four catalysts, BofA Securities' Jessica Reif Ehrlich wrote in a note:

1. A more widespread launch of Disney+ in Japan and price increases in other regions.
2. Re-openings and capacity increases at theme parks.
3. Resumption of film and TV releases.
4. Synergies stemming from the 21st Century Fox acquisition of certain assets.

Ehrlich maintains at Buy with a $192 price target

DIS Price Action: Shares of Disney closed Friday at $178.69.