Market Overview

Disney's Distribution Revenue Earns Stock Another Upgrade

Disney's Distribution Revenue Earns Stock Another Upgrade

Shares of Walt Disney Co (NYSE: DIS) hit a new 52-week high of $107.62 on Thursday as investor attitude towards the media empire continues to improve amid a notable upgrade from Vijay Jayant of Evercore earlier this week.

Jayant argued that Disney is well positioned to benefit from many macro-related trends which extend beyond 2017.

As if on cue, analysts at RBC Capital Management provided the second upgrade for Disney's stock this week.

CNBC's Carl Quintanilla Tweeted a snapshot of the upgrade, which noted that Disney's stock has been stock in a trading range of $95 to $105 despite a "monster" year at its Studio + Parks. This indicates that "squeamish" investors are about Disney's distribution future and the performance at its ESPN unit.

However, the analysts believe these fears are "somewhat assuaged" and a re-rating of Disney's stock is in order.

The analysts also pointed out that Disney will enter into a new round of affiliate deals late in fiscal 2017. Moreover, as these deals are finalized the company will see its affiliate revenue growth accelerate, which provides the "necessary optics for generalists and making it difficult for shorts to press."

The analysts upgraded Disney's stock from Sector Perform to Outperform with a price target boosted to $130 from a previous $101.

Shares were up about 0.6 percent at $108.02 in Friday's pre-market session.

Latest Ratings for DIS

Jan 2021UBSUpgradesNeutralBuy
Jan 2021CitigroupMaintainsBuy
Dec 2020Wells FargoMaintainsOverweight

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