Why Disney Might Keep Rallying in 2014

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of The Walt Disney Company (NYSE: DIS  ) gained about 1% this morning after Nomura Securities initiated coverage on the entertainment giant with a buy rating.

So what: Along with the buy rating, analyst Anthony DiClemente planted a price target of $90 on the stock, representing about 21% worth of upside to yesterday's close. While value investors might be turned off by Disney's strong return in 2013, DiClemente believes there's plenty of room to run given his view of accelerating profit growth.

Now what: Nomura expects Disney to post full-year 2013 EPS of $3.42 and $4.10 in 2014. "Because its organization has proven the ability to monetize marquee content across businesses, we believe Disney is best positioned to manage industry changes that are driven by digital technology," noted DiClemente. "We believe growth at higher-multiple businesses, in particular ESPN and the theme parks, will drive operating income acceleration in F2014E." When you couple that upbeat operational outlook with Disney's forward P/E in the mid-teens, Nomura's bullishness certainly seems reasonable. 

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