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Disney’s strong asset portfolio could aid the transition to streaming, according to Raymond James. The firm initiated coverage of Disney stock on Sunday with an outperform rating accompanied by a $97 per share price target. Raymond James’ forecast implies more than 13% upside from Friday’s $85.58 close. Disney stock has slipped 1.5% from the start of the year. DIS YTD mountain Disney stock has declined 1.5% from the start of 2023. Analyst Ric Prentiss says Disney is well positioned to cushion itself from potential fallout compared to peers from the transition to streaming, which has proven both costly and difficult to find an adequate price point. “Media companies are grappling with the transition from the profitable but declining Linear TV to the mostly unprofitable (as of now) but growing Streaming business,” Pretiss says. “We believe Disney’s assets position it well to navigate this transition.” Disney’s collection of media intellectual property and assets including Marvel, Star Wars and a renowned parks segment, will underpin a shaky transition to streaming with steady revenue and free cash flow, Pretiss said.. The analyst added that while the long-term outlook on the legacy media company is favorable, short-term headwinds including slower advertising spending and a potential buyout of Hulu from Comcast could weigh on the stock. “With added issues like the cyclical advertising downturn, broader macroeconomic fears, and disappointing recent box office results, we think the near-term outlook and trading could be choppy, but remain positive on the long-term return prospects,” he said. — CNBC’s Michael Bloom contributed to this report.
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