Long-term growth expected for Disney, says Morgan Stanley

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  • Analysts set a $135 price target
  • Shares see a 0.7% dip
  • Four major events expected to have a positive impact

Walt Disney Co. has gotten a boost from Morgan Stanley via a bullish note. The outlook for the media company is bright, according to the analysts, who have an overweight rating on the stock that is higher than average in comparison with an in-line rating covering the rest of the sector.

Morgan Stanley set a $135 price target for Disney shares, but they fell 0.7% and hit $110.39 during Thursday’s session.

Morgan Stanley Analyst Benjamin Swinburne wrote in a note: “2019 is likely a transformational year for Disney. Stepping back from the complexity, it will exit the year in a different place than it begins. Significant investments in content, theme parks, and M&A weigh on near-term earnings, but should set up the business for long-term growth.”

Four major events coming this year lay the foundations for Morgan Stanley’s expectations for Disney. One of these is closing the acquisition of assets belonging to Twenty-First Century Fox Inc. in the first quarter. Another is the launch of Disney’s own streaming service, Disney Plus, which will aim to take a share of the market currently owned by Netflix and Amazon.

Two other major events will be the opening of the Star Wars Land theme park in Orlando later in the year and renewals for ESPN and ABC multichannel video programming distribution deals around the same time.

Swinburne said: “With DIS shares essentially flat since mid 2015, when cord-cutting reached a level to impact ESPN, a successful 2019 can re-establish Disney as a growth company for the future.”

He added that the way that the company is building content assets will enable it to take advantage of new opportunities.

Brian Ducey

Brian graduated from Chaminade High School and the University Of Vermont Kalkin School Of Business with a concentration in Finance. He began his career with Knight Capital Markets, working his way to market maker. Brian later expanded his market repertoire, working with various sell-side research brokerage firms, such as Sidoti & Co., and William O’Neill & Co., as an Account Executive. With over 20 years-experience in the financial industry, Brian has built a unique perspective into “market intelligence” understanding an ability to read the tape and apply second level thinking in a fast paced environment. Brian also carried several market licenses, including the series 7, 24, 55, 65, and 63 licenses as well as previously passing The Connecticut Life and Health Insurance Exam