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Disney is trading at a discount, so it’s a good time for investors to scoop up shares, according to Raymond James. The investment firm upgraded the media giant to outperform from market perform. It also set a $115 price target, implying 19% upside from Tuesday’s close. That price target implies a forward multiple of around 14, “meaningful discount to the 10-year median given macro fears and Parks visitation headwinds.” “We see the current macro backdrop and international visitation headwinds as an opportunity to invest at a very attractive valuation,” analyst Ric Prentiss said in a note to clients. Disney shares have fallen 15% this year, pressured by expectations that attendance at the company’s theme parks could slump this year. The company is dealing with declining international visitors to its domestic parks. At the same time, Disney faces increased competition from Universal Studios, which opened its Epic Universe property to the public last spring. However, Disney stands to benefit from several tailwinds that could offset some of those headwinds, according to Raymond James. Those include the launch of two new cruise ships and a Frozen-themed expansion at Disneyland Paris. “We have stress-tested our model … examining not only our base case, but several bear cases with varying levels of severity, and believe the stock remains historically cheap even in some of the more draconian scenarios,” Prentiss wrote. Disney is also poised to gain ground on easier content and linear comparables, in addition to more favorable sports rights costs on the TV and streaming sides, the analyst noted. Disney’s streaming business represents the majority of the growth in the company’s operating income between fiscal year 2025 and estimated fiscal year 2028, based on a combination of data from the company and analysts’ forecasts, per Raymond James. That means headwinds affecting Disney parks may impact the firm’s bottom line less than some investors have anticipated, according to Prentiss. Raymond James’ call falls in line with consensus on Wall Street. Of the 33 analysts covering Disney, 27 have a strong buy or buy on the stock, per LSEG.
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