Stock Price Forecast The 25 analysts who offer 12-month price forecasts for Walt Disney Co have an average target of 140.00, with a high estimate of 160.00 and a low estimate of 120.00. The median estimate represents an increase of +21.57% since the last price of 115.16.Disney, like many other companies, has come under scrutiny regarding its position within the sociopolitical demographics of markets. Disney's profits are likely to recover strongly this year, driven mainly by the recovery of its lucrative theme park business. On April 21, Florida's Republican-governed legislature was able to pass a bill that could see The Walt Disney Company lose its special district privileges within the outer limits of Orange and Osceola Counties, FL.
Not all negative situations are lasting for big companies that earn billions in annual revenue, and Disney is no different. However, Disney's inherent operating leverage is expected to help increase its tight EBIT margins, despite normalizing revenue growth. Disney's streaming business, while still at a loss, also seems to be making solid progress. We think it's very healthy, since Disney shouldn't be credited with such an aggressive growth premium when it obviously can't deliver.
Disney has also seen a public relations crisis related to its handling of Florida's controversial legislation on Parental Rights in Education, which, in turn, has prompted Florida legislators to pass a law that would strip Disney of self-government status in the state starting next year. This would take a lot of consideration from Disney, but it could mean that investors will be more interested in its current low-priced stocks. Disney shares have seen a significant sell-off this year, falling nearly 37% year-to-date, with a yield significantly lower than the S%26P 500, which continues to decline 19% over the same period. Meanwhile, Disney shares are selling at a price-sales ratio of 2.2, close to their lowest level in the previous decade.
The revival could be what Disney needs, and not without much effort and billions of investments, has the company been able to mitigate financial losses in recent years as the pandemic struck and threatened to keep theme parks closed. However, we believe that the valuation of DIS shares has fallen to attractive levels that underestimate the company's ability to gain significant leverage.