Citigroup upgraded The Walt Disney Company (DIS) on Monday due to higher 2014 estimates.
The Citigroup analysts upgraded the company from “Neutral” to “Buy” and boosted the price target from $50 to $54. The new target is a +14.7% upside from Friday’s closing price of $47.06.
Citigroup noted, “During fiscal 2013, Disney acquired Lucasfilm ($4 billion) and will invest significantly in Parks ($500 million of opex investment). Together, these two items will conspire to push 2013 EPS downward. As such, our 2013 EPS moves from $3.38 to $3.29. This suggests that Disney’s 2013 EPS apt to grow just 7% this fiscal year. … We apply a 14x P/E multiple to Disney’s fiscal 2014 EPS of $3.83 to arrive at our $54 price target, up from $50 previously. As such, we’re upgrading Disney from Neutral to Buy.”
Walt Disney shares were up 69 cents, or +1.47%, in premarket trading on Monday.
The Bottom Line
Shares of The Walt Disney Company (DIS) have a 1.27% dividend yield, based on Friday’s closing stock price of $47.06. The stock has technical support in the $44-$45 price area. If the shares can firm up, we see overhead resistance around the $50-$51 price levels.
The Walt Disney Company (DIS) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.