Ahead of Walt Disney’s Annual Meeting the Company’s Stock Has Been Upgraded By Barclays
As the proxy battle between The Walt Disney Company and activist investors Nelson Peltz and Blackwells enters its final days, Disney has gotten some good news from Wall Street.
Barclays analyst Kannan Venkateshwar upgraded the stock from Equal Weight to Overweight and boosted his price target from $95 to $135. The move implies a 15% based on current trading levels of about $120 a share.
The Walt Disney Company
Venkateshwar said that Disney’s better-than-expected free cash flow coupled with “tactical tailwinds” such as the Hollywood strikes, Hulu’s merger with Disney+, and Disney’s cost cuts have helped boost investor confidence.
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Meanwhile, “the propensity among media investors to be long Disney has resulted in the stock outperforming broader markets meaningfully thus far this year, at a pace faster than we anticipated,” Venkateshwar wrote.
Disney’s Stock Has Been on Fire
Since the start of 2024, Disney’s stock has been on a tear. Disney is up 30% since the beginning of the year, compared to the 10% that the S&P 500 has risen.
The Walt Disney Company
In spite of the ongoing proxy battle and the decline of linear television, Venkateshwar argued that Disney’s next period “may be more impactful as a number of turnaround elements still remain work in progress and may manifest more in numbers starting next year.”
“We expect Disney streaming to break even potentially a quarter or two earlier than company guidance of Q4 2024,” he explained. “This is in part driven by the tailwinds from cost cuts over the last few quarters and recent price increases.”
Photo: Chip Somodevilla/Getty Images
In streaming, Venkateshwar believes that Disney will eventually achieve margins “that [are] better than Netflix,” eventually reaching the 25% to 30% range. Those numbers would be “not too different from where linear margins today are.”
The Proxy Battle Draws to an End
As Bob Iger and the Disney board prepare to square off with Peltz and Blackwells, they seemingly have the support of Wall Street. With their stock prices rising and the investors bullish, Disney looks to be in a good position.
Nelson Peltz
The Walt Disney Company annual meeting will take place on Apri 3, 2024.
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