Disney shares to rise 20% to $ 166, analyst says
Disney (NYSE: DIS) offers its shareholders many ways to profit.
That’s what Bank of America analyst Jessica Reif Ehrlich says. On Friday, it reiterated its buy rating on Disney shares and raised its price forecast from $ 146 to $ 166. Its new target price represents potential gains for investors of 20% over the current Disney share price of close to $ 138.
Disney shares have a lot of potential, Bank of America analysts say. Image source: Getty Images.
Reif Ehrlich highlighted Disney’s “spectacular” direct-to-consumer sales trends, which contributed to the entertainment titan’s better-than-expected performance in the fourth quarter. The incredibly popular streaming service, Disney +, saw its number of paid subscribers grow to over 73 million in its first year. This places its growth rate well ahead of Disney’s target of 60 to 90 million customers by the end of fiscal 2024, set by management when the service launched in 2019.
Going forward, Reif Ehrlich sees the reopening of Disney parks and resorts, as well as the return of blockbuster movie releases, as powerful engines for future growth.
Will Disney stock hit $ 166?
Disney + is an absolute home run for the entertainment colossus. The streaming service appears on track to hit 100 million subscribers – an incredible number, given that it is well above even the high end of Disney’s initial five-year growth target. Some analysts believe Disney could approach up to 250 million subscribers in the coming years.
Additionally, while coronavirus-related closures and capacity caps resulted in significant losses for Disney parks and resorts during the pandemic, a safe and effective COVID-19 vaccine could lead to a rapid upturn in customer traffic. In turn, earnings from this key segment of Disney’s business could rebound strongly over the coming year.
So the Disney share price could easily meet and exceed Reif Ehrlich’s $ 166 price forecast, delivering nice gains for shareholders along the way.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.
