The investment firm says Disney is well-positioned as a global media/entertainment group with a vast intellectual-property library, especially as the industry moves to a direct-to-consumer model.
"We continue to view DIS as very well positioned in global media/entertainment (and the shift to direct to consumer) on account of its franchises/brands/assets (Marvel, Star Wars, Pixar, National Geographic, Disney/Disney+, ESPN/ ESPN+, Hulu/HLTV, Hotstar, others) and competencies (merchandising, advertising, M&A)," analyst Matthew Thornton said.
Disney shares at last check were up 1.2% at $188.11. The $205 target indicates 10% potential upside from Thursday's closing price at $185.93.
The Burbank, Calif., company is scheduled to report its latest earnings numbers next month. Truist analysts expect to hear comments on how the recent price increase on the Disney+ streaming service affected audience churn as well as comments on the new National Football League deal.
The firm will also be looking for any update on the launch timing of Disney+/Star/Hotstar in Eastern Europe as well as any new plans for the Middle East region.
"Further, we continue to think [Disney's] parks could recover to higher revenue and profitability (as we expect pent-up demand for higher-end family destinations, on top of new cost efficiencies likely found during the pandemic)," Thornton said.
And the firm continues to expect "parks and products to benefit from increased DTC content spend (more attractions and product licensing)."