Will Disney's Shares Continue to Climb After Reaching a Fresh 52-Week Peak?
In the past 18 months, Disney has demonstrated significant growth and outperformance, surpassing the S&P 500. The company's stock reached a multi-year high in mid-2025, following a rally of over 50% since April 2025.
Key factors driving Disney's growth include strong earnings reports, improved cost efficiencies, better-than-forecast sports advertising revenue, and favourable analyst upgrades. The resurgence in investor risk appetite and broader market gains have also contributed to Disney's success.
Disney's earnings from continuing operations have soared nearly threefold in the same time frame. The company's stock has ascended 11% this year, more than double the S&P 500's 5% gain. Guggenheim analyst Michael Morris has boosted his price target on Disney shares from $120 to $140, maintaining his bullish buy rating.
Disney's recent theatrical releases have had mixed results, but Morris believes the strength of Disney's experiences segment, favourable sports advertising forecast, and encouraging operating expense outlook for linear networks will more than offset any studio stumbles.
Morris also sees Disney's taking full control of Hulu as a strategic move to bundle its direct-to-consumer streaming platforms more effectively. Disney shares are trading at almost 20 times Wall Street's profit target for the new fiscal year, which starts in three months.
Despite reaching a fresh 52-week high on Thursday and again on Friday this week, earnings estimates have been inching higher since Disney's strong quarter. The company has posted double-digit percentage beats on the bottom line in all but one of its past four quarters.
However, the global economy remains a potential risk factor for Disney. As long as it doesn't become a "Disney villain," the company should continue to enjoy its dominant market position. A new Disney-licensed theme park is being built in Abu Dhabi, bankrolled by the developer. Disney also has a promising slate of multiplex releases in the second half of this calendar year.
Overall, Disney's growth has been driven by solid operational improvements, strategic divestitures, robust advertising revenue, favourable analyst upgrades, and broad positive market dynamics, enabling it to outperform the S&P 500 over the last 18 months.
- Investors are looking favorably at technology-driven strategies implemented by Disney, such as the bundling of direct-to-consumer streaming platforms, as seen in their decision to take full control of Hulu.
- With the potential for increased revenue from entertainment sources like sports advertising and upcoming multiplex releases, Disney's investor interest extends beyond just the finance sector and reaches into the realm of entertainment.
- As Disney's earnings continue to surpass expectations and its stock outperforms the S&P 500, many analysts like Michael Morris see potential for further growth in the company's financial standing, with price targets being raised all the way up to $140 per share.
