Raymond James keeps Outperform rating on Disney amid international growth focus

Raymond James has reaffirmed its Outperform rating on Walt Disney stock but slightly reduced its price target from $120 to $119. The adjustment comes as the firm updates its model ahead of Disney's fourth-quarter fiscal 2026 earnings. Disney's current stock price of $102.19 suggests potential upside to Raymond James' new target.

The firm anticipates some weakness in Disney's Asian parks, particularly in Hong Kong and Shanghai, due to continued consumer challenges in China. However, Raymond James does not expect the impact to match the severe decline seen at Universal's Osaka park, where Chinese visitation has plummeted.

For fiscal 2027, Raymond James forecasts a front-half weighted earnings year, driven by factors such as the launch of two cruise ships, major events like the Grammys and Super Bowl, and the timing of holidays. Disney has guided for double-digit adjusted earnings per share growth in fiscal 2027, excluding the impact of a 53rd week in fiscal 2026.

Raymond James has also revised its streaming margins, reflecting higher programming, production, and marketing costs as Disney accelerates spending in international markets. The firm now expects slower direct-to-consumer margin growth but faster revenue growth in the short to mid-term. Disney aims to triple its international and local Disney+ content output over the next three years.