1 Wall Street Firm Raises Disney's Price Target Almost 25%: Here's Why It's Right.

Walt Disney (DIS -2.49%) shares have been on a roll. The stock is higher by 25% year to date. This week, analysts at Morgan Stanley said they still believe the stock is a buy and boosted the firm’s price target on Disney.

The new target of $135 per share is a raise of 23% from the previous target and would represent a gain of 20% from Disney’s recent stock price. The analysts highlighted several things that show the momentum in Disney shares should continue.

Positive business developments

Disney has made several recent announcements showing a renewed focus on driving profitability. In its recent quarterly conference call for analysts, CEO Bob Iger stressed building the streaming segment into a profitable one, reinvigorating its lagging film studio offerings, and investing in its successful parks segment.

Those remarks are what drove Morgan Stanley to raise its stock price expectation. It noted a positive view that Disney’s streaming services will reach profitability in the coming months and quarterly periods. Disney has said it continues to expect profitability from streaming by later this year.

Disney’s plan to continue to invest in its parks segment is also driving the firm’s thinking. The analysts there consider the performance of Disney’s streaming services and parks segments as critical to driving its stock price higher. The analysts expect to see improvement in the results from both segments as the year progresses.

Disney has been working to drive an increase in shareholder value from these important areas of the company. It announced a plan to offer a new sports-oriented streaming service in a partnership with Fox and Warner Brothers Discovery. It also is trying to leverage its popular ESPN channels.

Disney has great assets and its renewed focus to enhance shareholder value should help the stock reach this new price target.

Howard Smith has positions in Walt Disney and Warner Bros. Discovery. The Motley Fool has positions in and recommends Walt Disney and Warner Bros. Discovery. The Motley Fool has a disclosure policy.

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