"Raymond James argues that Disney shares are historically cheap even in some of the more draconian scenarios it stress tested. The firm's upgrade centers on valuation: the current macro backdrop and international visitation headwinds have compressed the stock to a level where risk/reward is attractive at current levels."
"In Q1 FY2026, Entertainment SVOD operating income rose 72% year-over-year to $450 million, with an 8% margin. Disney has guided for a 10% Entertainment SVOD operating margin for full-year FY2026, with double-digit adjusted EPS growth expected in both FY2026 and FY2027."
"Disney operates across three major segments: Entertainment, Sports (ESPN), and Experiences. In Q1 FY2026, the Experiences segment posted record quarterly revenue of $10.006 billion, up 6% year-over-year."
Raymond James upgraded Disney's stock rating to Outperform, setting a price target of $115. The firm believes Disney shares are historically cheap, presenting an attractive risk/reward scenario. The streaming business is identified as a key growth driver, with significant operating income growth reported. In Q1 FY2026, the Experiences segment achieved record revenue, and combined Disney+ and Hulu subscribers reached 196 million. Disney's trailing P/E ratio is 14x, below the consensus price target of $129.22, indicating potential for stock appreciation.
Read at 24/7 Wall St.
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