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Bank Of America Adds Disney To 'US 1' List, Lifts Price Target To $168

Jayson Derrick

Walt Disney Co (NYSE: DIS) deserves credit for a successful introduction to its streaming video platform, but a combination of other factors prompted Bank of America to name the stock a top investment idea.

The Analyst

Bank of America's Jessica Reif Ehrlich added Disney's stock to the research firm's "US 1 list" with a price target lifted from $144 to $168.

The Thesis

Disney's new streaming platform Disney+ launch has yet to launch but the compelling offering could be a notable value driver of shareholder growth, Reif Ehrlich said in a research report. The platform is backed by high-quality content, an expanded library of original programming, a competitive pricing point and a go-to-market strategy that leverages all of Disney's assets across the world.

Other factors that prompted the research firm to turn more bullish on the stock include:

  • Continued momentum and traction at other streaming platforms including Hulu and ESPN+.
  • Multiple high-profile releases ahead, including "Avengers" on April 26, "Toy Story 4" in June and "The Lion King" in July.
  • Parks, Experiences & Consumer Product trends remain favorable and backed by favorable trends ahead of Walt Disney World's 50th anniversary in fiscal 2022.
  • Synergies from the acquisition of most of Fox's assets can generate $2 billion in cost savings by fiscal 2021.
  • Once gross leverage returns to 1.5-2 times, the company could resume capital returns.

Price Action

Shares of Disney were trading higher by 1.3 percent at $133.50 Tuesday morning.

Related Links:

Disney Scion Criticizes CEO Iger's 'Insane' Pay

What Wall Street Is Saying About Disney+

Latest Ratings for DIS

Date Firm Action From To
Apr 2019 Maintains Buy Buy
Apr 2019 Upgrades Sell Neutral
Apr 2019 Reinstates Overweight

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