Shares of Walt Disney Co (DIS) have started the year off with a bang, rallying 4.6% so far in 2018.
Most of those gains came Tuesday, after an upgrade by the analysts at Macquarie sent Disney stock higher. On Wednesday though, another upgrade by RBC Capital again fueled Disney higher, TheStreet's Jim Cramer said on CNBC's "Stop Trading" segment.RBC analyst Steven Cahall bumped his price target to $135 from $125 and maintained his Top Pick rating of Disney. He argues that Disney deserves a premium valuation vs. the overall market because of its "insulation to ecosystem challenges." Disney will also benefit from tax reform and a strong pipeline of content after its deal with Twenty-First Century Fox ( FOX) ( FOXA) is complete. Another positive? Disney has an ample stream of steady cash flow, he contends.
For what it's worth Rosenblatt analyst Alan Gould also upgraded Disney Wednesday, raising it to buy from neutral and hiking his price target to $130 from $115.
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Defense wins games, Cramer reasoned, pointing out that Disney's core assets like studios and theme parks will continue to drive its business. While investors have worried about its ESPN unit for years, that concern is starting to fade as the narrative continues to change, he explained.
Although the stock has been an under-performer over the past few years, Cramer, who also manages the Action Alerts PLUS charitable trust portfolio, has remained steadfast in his evaluation. While Disney has had its issues, he continues to like both the company and CEO Bob Iger.
It's a great stock for parents to buy for their kids, he concluded.
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