Disney In Bull Mode Since Earnings Release

Shares of Walt Disney have been on a tear since announcing Street beating revenue and earnings earlier this month. After a short pullback on profit taking recently the stock was back on the move higher Tuesday, rising by 1.6% to lead the Dow Industrials in a lackluster day on Wall Street.

The catalyst for the Tuesday gains was an investor’s note from analyst Ivan Feinseth of Tigress Financial. In the note he placed a $136 price target on the stock, representing a potential upside of roughly 25% from Tuesday’s closing level. That’s on top of the 21.1% that the stock has already gained in 2024.

There are a number of reasons for the optimism from Feinseth. First of course is the latest earnings report, which was better than expected by Wall Street. Revenue, earnings, and free cash flow were all up, however the stock is still trading at pre-pandemic levels.

Disney has been actively working to revitalize growth in its entertainment business, and that work looks as if it may be paying off. Every one of Disney’s theme parks was profitable in the last quarter, giving Disney, in the words of CEO Bob Iger, “an incredibly solid foundation to build upon.”

Disney has also been under pressure from activist investors to improve its performance, and to fully embrace AI in its entertainment division, both in its movies and at its theme parks. The activists have also suggested Disney spin off its hotel and parks business into a REIT to maximize profits.

While losses continue for Disney’s streaming video service, they were far smaller in this past quarter versus the year-ago period. That shows a significant improvement and another sign that the work Disney is doing is beginning to pay off.