Guggenheim Sticks with 'Buy' on Disney, Eyes Strong Fiscal 2027 Performance
Guggenheim maintained its 'Buy' rating on Disney stock, citing CEO Josh D'Amaro's vision for the company. The firm updated its model to refine the impact of the 53rd week on operating income across segments and quarterly financial cadence in fiscal 2027.
The revised 53rd week allocation is more heavily weighted toward Entertainment due to content amortized across an extra week and under-indexed at Experiences due to lower operating leverage benefit from labor costs. Guggenheim expects fiscal 2027 segment performance to be front-end weighted, benefiting from the first quarter timing of New Year's, cruise ship launches and the World of Frozen opening creating tougher second-half comparisons.
The firm adjusted for a lighter fiscal 2027 film slate and lower early year costs while maintaining double-digit revenue growth and modest margin expansion expectations for streaming video on demand. Guggenheim also lowered its fiscal 2027 free cash flow estimate to reflect incremental cash content spend in advance of streaming video on demand growth initiatives.