JP Morgan Still Likes Disney

In a report rolled out Wednesday, analysts at JP Morgan reiterated an Overweight rating on Walt Disney Co (NYSE: DIS), accompanied by a price target of $110. The firm said it continues to favor the company heading into earnings season, and sees it well positioned to report another quarterly beat on the back of strong results from its Parks and Consumer Products segments in particular.

The rating is also based on the company’s “scale and leverage in the global market,” as the media landscape continues to change.

From Consumer Products, the anlaysts expect “another quarter of double-digit revenue growth with high operating leverage,” and earnings growth of 26 percent. For Parks, “another quarter of impressive margin gains, up 120bps overall (+150bps domestic).” For fiscal 2016, they believe “Shanghai spending will not be a notable headwind, allowing for attractive margin gains to continue.”

As analysts found last quarter, their “conservatism toward the Studio given challenging Frozen comparisons could also be an area of continued outperformance given the success of Big Hero 6 and Cinderella, including the Frozen Fever short” (they forecast Studio earnings to fall 31 percent year over year).

For the fiscal second quarter, JP Morgan estimates EPS of $1.15, above the Street’s $1.09. According to the report, the analysts believe the upcoming earnings report, scheduled for May 5, could act as a positive catalyst for the stock. In addition, they expect to hear “updates on Shanghai, the capex outlook, and color around box office/consumer products sales from Avengers 2, which will have opened May 1.”