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Why J.P. Morgan Raised Its Price Target on Disney

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May. 1 2019, Published 12:17 p.m. ET

Disney’s analyst upgrade

Walt Disney (DIS) received a price target upgrade from J.P. Morgan on April 29. After the upgrade, the stock touched a high of $147.30 but closed down at $139.30. J.P. Morgan raised its price target to $150 from $137 and maintained its “overweight” rating on Disney. J.P. Morgan has also increased its estimates for Disney’s third-quarter earnings to $1.80 per share from $1.73.

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J.P. Morgan’s view

According to J.P. Morgan analyst Alexia Quadrani, Disney’s core business, especially the studio segment, has the potential to perform well on the back of successful Marvel movies, improved park attendance, and increased revenue from media networks.

The firm believes that the company’s core business has been overshadowed ever since the company unveiled its Disney+ streaming product that will launch on November 12.

Rating and target price

Among the 27 analysts providing recommendations on Disney stock, 20 recommended a “buy,” and six recommended a “hold.” Only one of the analysts recommended a “sell.” Analysts maintained a target price of $138.52 per share, which implies a discount of 0.9% based on its closing price of $139.3 on April 29.

Disney stock has grown 27.0% in the year-to-date (or YTD) period as of April 29. In comparison, Comcast (CMCSA), Netflix (NFLX), Dish Network (DISH), and CBS (CBS) gained 28.3%, 38.9%, 41.9%, and 18.8%, respectively, in the YTD period.

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