Jefferies recommended buying Disney stock after seeing several growth drivers at once

Analyst Jefferies upgraded its rating on shares of Walt Disney, the world's largest entertainment and media company, and sharply raised its target price - by more than 40%. In the first quarter of 2026, Disney plans to launch two new cruise ships at once, which, according to Jefferies, will be the main driver of growth of the company's quotations. At the end of trading on June 30, they added almost 1.5%, having updated the maximum since August 2022.  

Jefferies analyst Ed Alter upgraded his rating on Disney stock from «hold» to «buy» and raised his target price from $100 to $144, implying an upside of nearly 17% from Monday's close. Alter is now one of the most optimistic analysts on Disney securities, according to data from Yahoo Finance.

He singled out the launch of two new cruise ships from Disney Cruise Line in the first quarter of 2026 as a major growth driver. He estimated they could add between $1 billion and $1.5 billion in revenue to the company. Alter also noted the strong growth of the company's streaming business, especially through new content and sports on Disney+: recent hits include «Moana 2» and «Lilo and Stitch,» and ahead are the releases of «Avatar 3,» «Beastopolis 2» and the launch of ESPN's new streaming service.

«Disney is increasingly betting on its core strengths - bundled offerings, studio releases and sports content. According to our data, this strategy is paying off, with traffic to the Disney+ site up more than 40% year-over-year over the past three months,» Alter said in a note cited by CNBC. He added that audience growth, an expanding content library and an evolving advertising pipeline, including a new partnership with Amazon, are increasing the platform's scale and margins. On June 17, Disney and Amazonannounced a partnership to show more accurate ads on Disney's streaming services using data on Amazon purchases and content views.

The Jefferies analyst also recalled his concerns about a weak macro economy and a possible exodus of Disneyland visitors due to the launch of a new theme park from Universal Epic Universe, owned by NBCUniversal. That anxiety has receded, Alter reported. He emphasized that Jefferies data indicates a steady flow of guests to Disney theme parks, and the opening of a park from a competitor - along with two Disney cruises - can only boost tourist traffic to Orlando. «This creates a stronger base for future growth. We forecast operating profit growth of approximately 10% in fiscal 2026 and 8% in 2027 (vs. 3.6% in 2024),» the analyst wrote.

At the end of trading on June 30, Disney shares rose 1.4% to $124. This became their maximum since August 2022. Compared to the beginning of 2025, the market value of the company increased by more than 11%. For comparison: the main U.S. stock index S&P 500 for the same period added about 5.5%.

Last week, a Guggenheim analyst alsoraised his target price on Disney stock from $120 to $140 and reiterated a «buy» rating. It improved its outlook for the company's operating expenses in its cable TV segment, while also noting growth in sports advertising revenue and solid demand for Disney's parks and travel. Guggenheim also factored in a slight decline in box office receipts for recent movies and raised its operating profit expectations from $17.6 billion to $17.7 billion - $500 million above consensus. After Hulu's full transition under Disney's control, the company is well positioned to develop a unified streaming strategy and increase revenue through bundled offerings, according to an investment bank analyst.

None of the analysts who have assigned ratings to Disney securities recommend selling them. The vast majority - about 80% - recommend buying (Buy and Overweight ratings), while the rest recommend holding (Hold). The consensus target price of $129.8 implies the company's market value will rise another 5% over the horizon of the next 12 months.

This article was AI-translated and verified by a human editor