Disney (NYSE: DIS) stock mounted an impressive recovery in the latter half of 2024. The price of a single DIS share went from a yearly low of $85.60 to $111.35 by the close of the year. As positive as that development was, the overall 24.5% gain posted by the House of Mouse over the course of last year still underperformed the S&P 500’s 25% return.
The primary driver of this rebound was the entertainment giant’s Q4 and full-year 2024 earnings report, released on November 14 — which beat Street estimates both in terms of earnings and revenue.
By press time on January 23, the price of Disney stock had receded to $108.86 — having marked a 2.26% dip since the beginning of the year.
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Although the year has gone off to a slow start, Wall Street stock analysts are becoming increasingly bullish on the media titan. The latest addition to this consensus is Citigroup (NYSE: C) researcher Jason Bazinet — who deemed the stock’s risk-reward profile favorable and set a price target equating to a 15% upside.
Citi cites mergers, product launches, and conservative outlook for Disney stock at $125
Bazinet referred to Street estimates for the company’s earnings per share (EPS) as a tad high in a note shared with investors, but added that Citi sees the prevailing levels of Disney’s stock price as attractive from a risk-reward standpoint.
Further clarifying his statements, the analyst added that Citi expects the media conglomerate to post an 8% growth in EPS in 2025, with 11% and 13% growth in 2026 and 2026, respectively.
The Wall Street firm’s forecast assumes the following timeline in terms of Disney’s strategic mergers and launches — Indian assets merging with Reliance Industries in fiscal Q2 2025, ESPN Flagship launching in the Fall of 2025, and Hulu Live’s pending merger with FuboTV (NYSE: FUBO) closing in fiscal Q3 2026.
Additionally, Bazinet noted that Citi’s 2025 and 2026 EPS estimates, on which the $125 price target is based, are below Street estimates. The bear case assumes macro headwinds and DIS shares trading at 19x its forecast 2026 earnings — at $96, this mark represents a $12.86 downside from current prices.
In contrast, the bull case rests on muted cord-cutting and average revenue per user (ARPU) for Disney’s direct-to-consumer (DTC) platforms to come in above expectations. In this scenario, Citi sees the stock trading at a 22x multiple, or $134, to be precise — a $25 upside.
With all of the above in mind, Bazinet resumed coverage on the stock with a relatively conservative $125 price target and a ‘Buy’ rating. Investors considering a long position should keep an eye out for the company’s next earnings call, which will occur just under two weeks from the time of publication, on February 5.
Featured image via Shutterstock
