Walt Disney Co (NYSE:DIS, ETR:WDP) is entering a pivotal earnings season with growing investor optimism and a favorable setup for long-term growth, according to Jefferies analysts who recently upgraded the stock to a ‘Buy’ with a $144 price target.
This price target implies upside of 19% from Disney’s share price at the time of writing.
“We believe Disney sentiment has turned more positive as near-term macro concerns subside,” Jefferies wrote. “Most investors agree with our positive call, but there is still healthy skepticism around the potential for execution mishaps.”
For Q3, Wall Street analysts, on average, expect Disney to report a 2.4% year-over-year increase in revenue to $23.7 billion and earnings per share (EPS) of $1.47, representing almost 6% growth from the year-ago quarter.
Jefferies sees the fiscal third quarter as a crucial moment to “set the 24-month narrative,” with expected strength in both streaming and Experiences supporting their bullish thesis.
The analysts pointed to broad agreement from investors on the potential upside in Disney+, projecting the direct-to-consumer segment will report a 27% year-over-year increase in operating income, supported by strong user engagement.
“Disney+ US web visits grew an average of 40% year-over-year in fiscal Q3,” the analysts noted, with titles like Moana 2, Andor, and The Bear helping drive momentum.
Jefferies also expects stable performance from Disney's Parks business and continued acceleration in cruises, which are viewed as a major growth lever heading into fiscal 2026.
“Cruises trends continue to inflect upwards ahead of the 2 new ships in November and December,” they wrote, adding that recent data shows Disney World trends were the strongest in five quarters.
Looking forward, Jefferies points to a “favorable catalyst path” including the ESPN direct-to-consumer launch, theatrical releases like Avatar 3 and Zootopia 2, and rising cruise revenues, which could add over $1 billion to the 2026 fiscal year.
They expect Disney to maintain its full-year guidance of 16% year-over-year EPS growth.
“Given there are no signals of new structural issues in Q3, we'd expect Disney to trade more favorably as these catalysts near,” the analysts concluded.
Disney will hand down its Q3 report before markets open on August 6.