BofA Securities has adjusted its price target for The Walt Disney Company (NYSE: DIS), moving the target down to $125.00 from $140.00 while keeping a Buy rating on the shares. Disney is trading at $104.45, and consensus analyst coverage continues to skew positive on the stock according to InvestingPro data.
The research firm acknowledged that Disney maintained its fiscal year 2026 guidance for double-digit adjusted EPS growth, even as it drew attention to uneven performance across operating segments in the near term. At a P/E of 16.6, Disney is trading at a relatively low multiple when set against its near-term earnings growth expectations, a valuation profile that BofA and other analysts view as leaving room for upside despite current operational headwinds.
BofA laid out more granular expectations for second-quarter operating income by division. The bank anticipates Entertainment operating income to be roughly in line with the second quarter of 2025. By contrast, Sports operating income is forecast to come in about $100 million below the same quarter in 2025. Experiences operating income is expected to register only modest year-over-year growth.
Specific pressures on the Experiences segment were detailed by the bank. These include ongoing weakness in international visitation to Disney’s domestic parks and elevated pre-launch expenses tied to two major projects: the Singapore-based cruise vessel Disney Adventure and the World of Frozen expansion at Disneyland Paris, the latter of which will almost double the size of Disney’s second park at that resort.
Despite those headwinds, BofA noted some constructive demand indicators at Disney. Bookings are up 5% year to date, a figure the firm interprets as signaling a material improvement in the back half of the year. The analysis also highlighted that the Sports segment faces a step-up in rights expenses, an expense profile that will weigh on near-term profitability in that business line.
From a balance-sheet and scale perspective, Disney reported annual revenue of $94.42 billion and carries a market capitalization of $186.47 billion. BofA characterized the company as operating with a moderate level of debt and cited InvestingPro’s Financial Health score of "GOOD."
Separately, Disney has announced an executive leadership transition. Dana Walden will take on the role of president and chief creative officer effective March 18, 2026, and Josh D’Amaro will assume the position of chief executive officer, succeeding Robert A. Iger.
Market analysts have offered a range of views and price targets following Disney’s recent results. KeyBanc reiterated a Sector Weight rating, flagging concerns about international visitor trends even as domestic parks have exceeded expectations. Bernstein SocGen Group maintained an Outperform rating with a $129.00 price target. JPMorgan retained an Overweight rating and a $138.00 target while noting Disney’s adherence to its fiscal 2026 guidance despite short-term earnings pressures. Morgan Stanley resumed coverage with an Overweight rating and a $135.00 price target, pointing to expectations for double-digit adjusted EPS growth in fiscal 2026 and beyond.
These analyst positions accompany a pullback in Disney shares following recent earnings reports. The range of price targets and ratings among brokerages reflects a mix of caution about near-term segment-level performance and optimism about the company’s longer-term earnings trajectory as reflected in management’s guidance.
Summary
BofA Securities cut its price target on Disney to $125 but left its Buy rating intact, citing segment-specific headwinds in Experiences and Sports even as the company holds to double-digit adjusted EPS growth for fiscal 2026. Valuation metrics, bookings growth, and a generally healthy financial profile temper concerns, while a leadership change and differing analyst price targets highlight a split view across the market.
Key points
- BofA lowered its Disney price target to $125 from $140 and retained a Buy rating; Disney shares trade at $104.45.
- Management kept fiscal 2026 guidance for double-digit adjusted EPS growth, but BofA flagged Entertainment, Sports, and Experiences as showing mixed near-term operating trends.
- Financial metrics show $94.42 billion in annual revenue, a $186.47 billion market cap, moderate debt, and a Financial Health score of "GOOD."
Risks and uncertainties
- Weaker international visitation to domestic parks could further pressure the Experiences segment and the broader parks and leisure sector.
- Pre-launch costs for the Singapore Disney Adventure ship and the World of Frozen expansion in Disneyland Paris may weigh on near-term margins in Experiences.
- An expected step-up in sports rights expenses will increase cost pressure on the Sports segment and could constrain near-term operating income.