Seaport Research Upgrades Walt Disney (NYSE: DIS) to Buy Rating
Investing.com — Seaport Research upgraded Walt Disney to a Buy rating, setting a price target of $108 on the stock in a note Monday.
The upgrade signifies a shift in their outlook for Disney, citing improved macroeconomic conditions and emerging profitability in Disney’s direct-to-consumer (DTC) business.
Seaport analysts acknowledged they had previously underestimated Disney’s potential, stating, “This is a mea culpa on our outlook for DIS now that there are better macroeconomic underpinnings to the story.”
Earlier in the year, the analysts had downgraded Disney due to market declines and concerns about flat park attendance and decreasing operating income.
They noted that increased spending on technology and platforms for the DTC segment had led to lowered fiscal 2025 profitability estimates.
However, Seaport has shifted its position, emphasizing a stronger-than-expected economic outlook. “We are now upgrading DIS shares on the better macroeconomic outlook going forward (better than a soft landing),” they wrote.
The analysts acknowledged market acceptance of Disney’s current park demand and the potential for further growth in the DTC segment.
While they noted that Disney’s Parks segment has shown “tangibly soft” data, they believe this is temporary. Moreover, they see potential for increased revenue from the DTC segment, supported by recent price hikes and the introduction of paid sharing, which could enhance average revenue per user (ARPU) and subscriber growth.
Seaport’s revised outlook reflects optimism for Disney’s ability to leverage its existing demand and profitability in both the Parks and DTC segments, resulting in the upgraded rating and a new price target of $108.
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