Cowen Upgrades Disney, Bullish On Streaming Service And Movie Pipeline

Analysts at Cowen turned bullish on Walt Disney Co DIS ahead of the company's investor day presentation this week.

The Analyst

Cowen's Doug Creutz upgraded Disney from Market Perform to Outperform with a price target lifted from $102 to $131.

The Thesis

Disney's presentation on Thursday could prove to be the "deck-clearing event" to lift investor sentiment, CNBC quoted Creutz as saying in a note. The company boasts a "very powerful" pipeline of products that will be released throughout the year, including a lineup of films that could help the studio business record $3 billion in operating profit.

Disney's presentation could also offer a "needed number reset" related to the financial impact of the Fox deal and costs associated with the new direct-to-consumer streaming video service. Once fully understood investors can expect "Netflix-like valuations" for the streaming business to be seen in the near-term.

Shares of Disney are up just 5 percent in 2019, which is 10 percentage points shy of the S&P 500's 15-percent return.

Creutz says Disney's momentum could sustain beyond 2019 with the release of "Frozen 2" and "Star Wars Episode IX." These much-anticipated films could "set the stage" for a re-acceleration of growth in the consumer products business throughout 2020.

Price Action

Disney's traded around $115.53 per share Tuesday morning.

Related Links:

Disney's 'Dumbo' Flies Off With Weekend Box Office, But Not Quite As High As Expected

Imperial Capital Remains A Disney Bull Following Fox Closure