Disney Stock Remains A Buy For Analyst After Q1 Operating Income Strength

Walt Disney Company (NYSE:DIS) has laid the groundwork for a "solid start" to the fiscal year with its first-quarter results., according to Bank of America analyst Jessica Reif Ehrlich.

The Disney Analyst: Ehrlich maintained a Buy rating on Disney with a $140 price target.

The Analyst Takeaways: Disney's operating income was up 31% to $5.1 billion — a key highlight for Ehrlich in a new investor note.

Read Also: Disney Q1 Earnings Preview: Can ‘Moana 2,’ ‘Mufasa: The Lion King’ Help Continue Streak Of Analyst Beats?

Ehrlich said operating income for the entertainment, sports and experiences all came in ahead of her estimates. This includes the analyst forecasting negative operating income of $171 million for the sports segment in the quarter versus the actual result of positive $247 million.

Direct-to-consumer (DTC) operating income also came in ahead of the analyst's estimates as the streaming division continues to see improvements in profitability.

The analyst said the strong results come with several segments facing headwinds. The domestic theme parks division had declines in attendance. Recall how two hurricanes unfavorably impacted the segment for the quarter. Domestic parks saw higher guest spending in the quarter, which helped offset the attendance declines.

The analyst also said that the sports segment saw higher costs with the expansion of the College Football Playoff. These higher costs may have paid off with higher advertising revenue and sub-licensing revenue for the football games helping increase operating income for the segment.

Ehrlich said near-term catalysts for Disney include profitability inflection in DTC and reacceleration in the Parks business.

A strong film slate could also boost other business lines (DTC, Parks, Consumer Products).

Price Action: Disney stock is down 2.1% to $110.94 on Wednesday versus a 52-week trading range of $83.91 to $123.74. Disney stock is flat year-to-date in 2025 and up 14.8% over the last year.

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