Why Walt Disney Shares Could Pop to $100

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 Walt Disney  (NYSE: DIS  ) gained slightly in pre-market trading Thursday after Jefferies initiated coverage on the entertainment gorilla with a buy rating.

So what: Along with the bullish call, analyst John Janedis planted a price target of $100 on the stock, representing about 19% worth of upside to yesterday's close. So while contrarian traders might be turned off by Disney's price strength over the past year, Janedis' call could reflect a sense on Wall Street that strong operating tailwinds give the stock plenty of room to run.

Now what: Jefferies sees 2014, 2015, and 2016 earnings per share for Disney of $4.27, $4.71, and $5.57, respectively, versus the Wall Street consensus of $4.18, $4.63, and $5.30. "We think Disney is still at the early stages of a multi-year run where all segments will post solid growth," said Janedis. "In our view, the combination of pricing power and resulting margin expansion at the parks, continued success at the film studio with associated flow-through at the consumer segment, what we expect will be at least high single digit EBIT growth at the cable nets (we assume modest upside to current high single digit guidance, though are not modeling it), and sustained return of capital, will drive upside in the stock." When you couple that upbeat outlook with Disney's still-reasonable PEG of 1.2, it's tough to disagree with Jefferies' bullishness. 

Leaked: This coming consumer device can change everything
Imagine the multibillion-dollar sales potential behind a product that can revolutionize the way the world shops and interacts with its favorite brands every day. Now picture one small, under-the-radar company at the epicenter of this revolution that makes this all possible. And its stock price has nearly an unlimited runway ahead for early, in-the-know investors. To be one of them and hop aboard this stock before it takes off, just click here.  


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3008928, ~/Articles/ArticleHandler.aspx, 11/26/2014 4:14:34 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement