"Alice in Wonderland" characters pose in front of the Magic Kingdom's Mad Tea Party attraction.

Image source: Disney.

Shares of Disney (NYSE:DIS) are roaring back to life in 2017. Disney stock has hit fresh 52-week highs six times already this month. The most recent push to new highs was yesterday afternoon, as an analyst upgrade kept the bullish voices percolating.

Morgan Stanley's Benjamin Swinburne is boosting his rating on the stock -- going from "equal weight" to "overweight" -- offering up an upbeat prognosis for ESPN. You don't hear a lot of love for Disney's sports juggernaut. Bullish arguments typically cover Disney's recent box office successes and what its proven ecosystem can do with the Marvel, Lucasfilm, and Pixar franchises it has acquired. 

ESPN has been cast as the pressure point in Disney's portfolio, as cord-cutting millennials threaten the long-term prospects of what is the most expensive non-movie channel in most cable and satellite television programming bundles. With shrinking subscriber counts and escalating league contracts, it's easy to see why ESPN has many bulls concerned. 

Swinburne doesn't see things that way. He realizes that ESPN's holding Disney back from even greater heights in the eyes of Mr. Market, but he thinks naysayers are underestimating the network's prospects to improve its fate through new streaming deals and renegotiating its distribution fees. Swinburne is dramatically raising his price target, going from $101 to $124.

It could go all the way

There's no shame in being a reborn Disney bull, but Swinburne's upgrade is going to turn heads given the upbeat outlook for ESPN. Swinburne thinks Disney can grow its cable affiliate revenue from 2% last year to 5% through the next four years.

Disney's ability to not only sustain its affiliate revenue growth but to also pick up the pace is bold, but Swinburne believes that new streaming services including rumored Hulu and YouTube offerings that could include live sports options will help ESPN boost its subscriber base. With important distribution negotiations looming as many current deals expire in 2018, Morgan Stanley's analyst thinks the network has a chance to boost its rates -- an opinion that naturally isn't shared by bears arguing that ESPN's best days are in the past.

Happily ever after

Swinburne isn't basing his upgrade solely on ESPN, of course. He joins other bulls encouraged by Disney's upcoming slate of theatrical releases. Swinburne is also boosting his firm's outlook for the media industry. The same growing popularity of streaming services that he sees benefiting ESPN will also fortify content-heavy networks. 

We won't have to wait long to see if Swinburne's bullish turn was the right call. The media giant reports quarterly results next week. Disney doesn't need ESPN to flex its muscles to be a winner, but it certainly wouldn't hurt.