Goldman Sachs launches Disney coverage, cites growth prospects

Goldman Sachs has launched coverage on entertainment powerhouse Walt Disney (DIS). The investment firm has initiated a Buy rating on Disney stock, coupled with a bullish price target of $125 per share. Analysts at the firm point to the media giant's content pipeline as a key driver for mid-term growth success.

Yahoo Finance's Seana Smith and Madison Mills break down the details, providing insights into other media companies the firm views optimistically.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith

Video transcript

Time now for some trending tickers Goldman Sachs initiating coverage of Disney with a buy rating and $125 price target, saying mid term growth will be driven by its content.

And Sean Goldman noting that the media industry is still in flux while shifting to direct to consumer growth.

But saying quote, competitive moats and high growth visibility given a name like Disney more room to run here.

And so it's interesting, I know you're going to talk about this too, but it's not just Disney, they're also uh being rated in terms of Comcast and Fox.

Uh and they've also got paramount as well on the list of names here.

But again saying that the industry is in flux.

However, they do see potential room for growth on adjacent businesses that are less impacted by cord cutting and that is specific to Disney Comcast and Fox.

Yeah, it certainly is.

And what struck me also about this note was the price target and exactly what they're coming out in terms of bullish call here for Disney.

You see the 23% upside from the previous close that price target of 100 and 25 bucks a share for Comcast, it's 14% upside for Fox 22% upside.

So taking into account what you just said, just in terms of the fact that the media industry still is in flux as it shifts here, it's focused on profitable DTC growth while trying to manage some of the declines that they're seeing across the traditional linear aspect of the business.

I do see reason to be optimistic and I think that that has been really the debate here across the street over the last several quarters when it comes to so many of the traditional and now streaming players here, how they are going to have or what the ability is for so many of these names to offset some of the declines within their traditional business and really focus on some of the growth or profits here that are coming from the streaming business and how to do that in a way that isn't spending too much.

And, and I think that's a very, very tough line when they're trying to close the gap with a leader within this space like Netflix.

When they have so much content, they need to spend, we've been seeing more and more bundling and it looks like that that is starting to pay off here or could pay off down the road.

But again, an interesting call here just in terms of why they are still bullish or the fact that they are bullish on the Disney Comcast and Fox.

And then of course, also want to bring up that, celebrating that we also got here from Goldman when it comes to Paramount, very important to note as well.