Disney snags bullish rating from Jefferies on Cruise unit upside, favorable content and sports slate

Jefferies on Monday upgraded media and entertainment giant Disney (NYSE:DIS) to “buy” from a previous investment rating of “hold” and hiked its price target, citing four key points.

The research firm previously saw overhang from the tough macroeconomic environment and competition from Universal Epic Universe (CMCSA), but those concerns have been eased after the company gave positive comments on Disney World bookings, which have reduced slowdown risks for FY25 in the P&E unit.

In 2026, Jefferies expects the Experiences unit to be well-positioned for growth after the company launches two new cruise ships, which they expect to drive an estimated $1B-$1.5B run-rate in incremental revenue.

Jefferies expects DTC margins to drive operating income growth. “Stronger user growth and content coupled with advertising (new AMZN partnership) should drive enhanced scale and margins,” the research firm said in its June 30 note.

They also think the company has content and sports on the right path for the next six months with the new season of The Bear and films like Fantastic Four, Zootopia 2, and Avatar 3, along with ESPN DTC launching this fall.

DIS has a PT of $144, up from $100, implying an upside of 19%. Shares of the company are up 1.6% in premarket trading.