Is Shanghai Disneyland Material To Disney Stock?

In a report published Monday, Jefferies analysts reiterated a Buy rating on

, while raising the price target from $105 to $120. The analysts cited weakening of macro risks and the potential contribution of Shanghai Disneyland as reasons for the upward revision. Assuming ticket prices at Shanghai Disneyland to be in-line with the parks at Hong Kong and Tokyo and the target market, the analysts expect the park's ticketing revenue to grow from $386M in Yr 1 to $884M in Yr 5. "We expect attendance at the park to approach 18M and EBIT just north of $250M (consolidated) by 2021," the analysts stated. Jefferies has revised its model to reflect the Shanghai estimates of 10 million visitors in the first year, per capita spend of $67.25, hotel occupancy of 75 percent and blended average room rate of $139. The analysts expect the company to report a consolidated loss of $65 million in its first year and make a profit (before royalties and management fees) of $51 million in the third year and $254 million in the fifth year. "Given underlying organic growth/ asset mix, we expect the stock's valuation to remain decoupled from media & continue to drift upwards toward the Consumer Staples' valuation range," the analysts mentioned.