Citi analysts have resumed their coverage of the Walt Disney Company with a Buy rating. They highlight the stock as presenting an attractive risk-reward opportunity based on current valuations. The optimism stems from the company’s long-term growth potential, especially within streaming and entertainment sectors.

Citi’s Earnings Forecast

Citi’s projections for Disney’s adjusted earnings per share (EPS) growth are listed as follows:

• 8% growth in FY 2025
• 11% growth in FY 2026
• 13% growth in FY 2027

These projections are in line with Disney’s forecasts of high single-digit EPS growth for FY 25 and anticipated double-digit growth in the years following. However, Citi’s estimates of an expected $5.35 EPS for FY 25 and $5.95 EPS for FY 26 fall slightly below consensus expectations by 2% and 4% respectively.

Target Prices and Growth Catalysts

Citi set a target price of $125, hinting at a 15% upside from Disney’s current trading value of $108.70 as of January 21.

The growth prospects identified by Citi include:

1. Growth in Streaming:
• Expected to reach approximately 10% EBIT margins by 2027.
• Predicted annual ARPU growth of 2-4%.
• Subscriber growth of:
• 8 million in FY 25
• 7 million in FY 26
• 6 million in FY 27
2. Integration with Hulu Live-Fubo:
• Expected to finalize by fiscal Q3 2026.
• Projected annual synergies of about $140 million.
3. Recovery in Entertainment Segment:
• Citi predicts a 20% rebound in box office revenues in FY 25, enhancing Disney’s media revenue.

Risk Scenarios

Citi has outlined both bullish and bearish scenarios affecting Disney’s stock prices:

• Bearish Case:
• Economic slowdowns or intensified competition could reduce stock prices to approximately $96.
• Bullish Case:
• Faster-than-expected ARPU growth and better valuation could see prices soar to $134.

Disney’s Forward Outlook

Citi remains optimistic about Disney’s transition to profitability within streaming while maintaining investments in parks and cruise segments to secure long-term growth. The firm highlights Disney’s potential upturn based on strategic initiatives and investments.

Monitoring Disney’s Financial Performance

Investors interested in staying updated on Disney’s performance can use various resources offered by Entreprenerdly.com:

• Balance Sheet Statements – Insights into Disney’s financial positioning, assets, and liabilities.

• Company Rating – Evaluate Disney’s financial health and market standing.

Conclusion

With its strategic emphasis on streaming growth, monetization of content, and potential improvements in the entertainment sector, Citi regards Disney as an enticing investment choice. While short-term challenges exist, the long-term forecast appears bright, bolstered by robust brand equity and strategic undertakings.