November 12, 2012 at 08:54 AM EST
Walt Disney Upgraded to “Buy” at Citigroup (DIS)

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.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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