Needham & Company Upgrades Walt Disney (DIS) to Buy, 'The Magic's Back'
Needham & Company analyst Laura Martin upgraded Walt Disney (NYSE: DIS) from Hold to Buy with a price target of $120.00.
The analyst comments "We upgrade DIS to BUY based on our expectations for strong (23%) FY24 EPS growth driven by additional cost savings (>$7.5B), DTC breakeven by 4Q24 with "double-digit" margins at maturity and 5.5mm-6mm new subs from CHTR in FY2Q, new ESPN Sports JV with FOX and WBD, $1.5B investment in Epic Games (build DIS video games), 70% of $60B Parks CapX will be "incremental capacity" (ie, added revs), $8B of FY24 FCF, exclusive Taylor Swift concert rights on Disney+, a 50% higher dividend (to $0.45), and >$3B of share repurchases in 2024. Longer term, we believe bundling can lower churn by up to 50%. In Sept 2024, DIS will offer its new Sports JV as part of its bundle, and in fall 2025 DIS will offer a new flagship ESPN+ service to its Disney+ and Hulu subs. Larger bundles lower churn and raise LTV, we believe."
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Shares of Walt Disney closed at $99.14 yesterday.