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Morgan Stanley reiterated an Overweight rating and $115.00 price target on Disney (NYSE:DIS) ahead of the mass media company’s 1Q23 earnings report. The bank’s analysts remain optimistic that Disney’s Parks segment, which represents the majority of its earnings, can deliver healthy growth in FY23 and beyond. However, increasing the contribution from the Media segment by both improving monetization and lowering costs are key to the bull case.
The analysts wrote in a note, “We continue to believe Disney can deliver significant earnings growth over the next several years. This growth is expected to come through continued growth at its Parks & Experiences businesses (DPEP) and a return to growth for its Media & Entertainment businesses (DMED) in F24.”
Morgan Stanley forecasts adjusted EPS growing at a 20%+ CAGR from F22 through F25. They also trimmed 1Q23 Disney Plus core net adds estimates to +1.2mm (from +2.5mm) to account for the potential elevated churn from recent US price increases.
The company is expected to release earnings results after market close on Wednesday, February 8th.
Shares of DIS are down 0.61% in premarket trading on Monday.
