Cowen Upgrades Disney, Bullish On Streaming Service And Movie Pipeline

Analysts at Cowen turned bullish on Walt Disney Co (NYSE:DIS) ahead of the company's investor day presentation this week.

The Analyst

Cowen's Doug Creutz upgraded Disney from Market Perform to Outperform with a price target lifted from $102 to $131.

The Thesis

Disney's presentation on Thursday could prove to be the "deck-clearing event" to lift investor sentiment, CNBC quoted Creutz as saying in a note. The company boasts a "very powerful" pipeline of products that will be released throughout the year, including a lineup of films that could help the studio business record $3 billion in operating profit.

Disney's presentation could also offer a "needed number reset" related to the financial impact of the Fox deal and costs associated with the new direct-to-consumer streaming video service. Once fully understood investors can expect "Netflix-like valuations" for the streaming business to be seen in the near-term.

Shares of Disney are up just 5 percent in 2019, which is 10 percentage points shy of the S&P 500's 15-percent return.

Creutz says Disney's momentum could sustain beyond 2019 with the release of "Frozen 2" and "Star Wars Episode IX." These much-anticipated films could "set the stage" for a re-acceleration of growth in the consumer products business throughout 2020.

Price Action

Disney's traded around $115.53 per share Tuesday morning.

Related Links:

Disney's 'Dumbo' Flies Off With Weekend Box Office, But Not Quite As High As Expected

Imperial Capital Remains A Disney Bull Following Fox Closure