Walt Disney (DIS -0.04%) stock has surged recently following a positive earnings report in early February that showed improving profitability in the company's parks and streaming businesses.
But even after a sharp rise that brought the stock back above $100 for the first time in almost a year, Tigress Financial analyst Ivan Feinseth sees the stock heading to $136, representing 26% upside from the current share price of $108.
Feinseth is 61% accurate on previous calls, according to TipRanks, so the analyst's buy rating is worth noting.
Why buy Disney stock
Disney has been the target of activist investors that want to see better financial results, and the company is starting to show progress. Revenue, earnings, and free cash flow were all up in the fiscal 2024 first quarter (ended Dec. 30, 2023). But the stock is still trading at the same levels it did prior to the pandemic, which suggests it could be due for a bull run.
Disney is in the process of revitalizing growth in its core entertainment businesses. It's an encouraging sign that every one of Disney's parks was profitable in the quarter, which CEO Bob Iger said gives the company "an incredibly solid foundation to build upon."
Wall Street has been most focused on the losses in the streaming business. The direct-to-consumer segment reported an operating loss of $138 million last quarter, but that was a significant improvement from the $984 million loss a year prior.
Overall, Disney's earnings per share increased 49% year over year in the first quarter, and there's nothing that will get a stock moving higher than a positive outlook for profitable growth.
The consensus Wall Street estimate has Disney growing earnings 23% this year and 17% on an annualized basis over the next five years.
