Wells Fargo Sees Significant Upside for Shares of Walt Disney (DIS)

Shares of Walt Disney (NYSE: DIS) are higher by 38 percent year-to-date, compared to the S&P 500 which is higher by only 16 percent. Considering the performance, many investors are wondering if the Disney rally is over. According to analysts at Wells Fargo, the answer is, simply, “no”.

"We see several reasons why DIS is the one stock most likely to attract the incremental investor. Our underlying premise rests with the fact that DIS's global brand should ultimately warrant a comparison to other companies of the same stature rather than the 'black-and-white' comparison to Viacom (Nasdaq: VIAB) CBS (NYSE: CBS), News Corp (Nasdaq: NWSA) and Time Warner (NYSE: TWX)," said analyst Marci Ryvicker.

Walt Disney is growing significantly faster than its global peers, but it trades at a 1.5x discount, which translates into roughly $6/share of incremental upside, noted the analyst report.

“Given the significant reduction in DIS’s capex coming in F2013, we don’t see why DIS wouldn’t target a global peer dividend yield over time, which we calculate could be 3.0%, suggesting 160% upside to DIS’s current annual $0.60/share recurring dividend,” said Ryvicker.

In keeping with the bullish sentiment, Wells Fargo raised their price target to $58.00 to $60.00 from $56.00 to $58.00. Wells has an Outperform rating on Walt Disney.

For an analyst ratings summary and ratings history on Walt Disney click here. For more ratings news on Walt Disney click here.

Shares of Walt Disney closed at $51.90 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Dixon Technologies India Ltd (DIXON:IN) PT Raised to INR8,800 at HSBC
• LivePerson (LPSN) PT Lowered to $1 at Loop Capital
• Intra-Cellular Therapies (ITCI) PT Raised to $107 at Canaccord Genuity