Walt Disney Co. (DIS) shares rose sharply on Friday after Barclays' analysts raised their outlook on the stock, with a price target of $ 130, to overweight after the 21x Century Fox (FOXA (19659002) Barclays analyst Kannan Venkateshwa raised his price target by $ 25, saying that Disney will have a strong record and cost synergies following the $ 71.3 billion deal for Fox's media assets becoming Comcast's top competitor Corp. (CMCSA). He also noted that Disney may see "greater visibility" in business units like its ESPN sports network, which costs are rising and customers are turning to more a la carte options.
Action Alerts PLUS with Disney shares hit 2.3% on Friday's opening bell and changed ownership for $ 1
Earlier this week, Morgan Stanley raised its price target by $ 5 to $ 135 per share. Disney expects a 15.3-fold profit for 12 months, compared with an 85-fold PERC for Netflix, suggesting that the stock offers much better value at the current levels. It is also estimated that its online streaming platform Hulu will generate revenue of approximately $ 4 billion in 2018.
The Action Alerts team wrote earlier this week that the recently launched ESPN + DTC subscription service put pressure on one million customers in September here ), and strong attendances at the start of the NFL season support healthier ones trends. Overall, we consider Disney's growth initiatives as an underrated story in this market, and we value the value we receive at the current level.
Thetreet's technical expert Bruce Kamich notes the Disney stock price may be "Above the 50-day moving averages and the 200-day bullish line" could be a "re-test of the 50 Days line in this currently weak stock environment happen. "
Still, Kamich remarks, Disney could "Stage a big step from here" and "maybe a trade over $ 120 will do it." Stay tuned.