Disney CEO Bob Iger has rekindled investor interest in the entertainment giant, as several Wall Street firms have become increasingly optimistic about the company’s stock following the announcement of a new theme park in Abu Dhabi, the capital of the United Arab Emirates.
This development marks the introduction of Disney’s seventh theme park.
In the two trading sessions leading up to Thursday’s close, Disney shares saw a surge of approximately 13%. Analysts at Morgan Stanley, UBS, Barclays, and Loop Capital have responded by raising their price targets for the stock, now ranging between $120 and $125 per share.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DIS | THE WALT DISNEY CO. | 105.12 | +3.03 | +2.97% |
This adjustment suggests a potential upside of 19% from current share prices. Before this announcement, Disney’s stock had suffered a 17% decline this year.
“It was very obvious to us that there were many people, basically hundreds of millions, in the world that are income-qualified where a trip to one of our six locations was pretty lengthy in nature and expensive. And so we felt the best way, obviously, to reach those people is to basically bring our product to them,” Iger disclosed during a recent earnings call.
“We talk about it as being at [the] crossroads of the world: 500 million income-qualified people live within four hours; 120 million people are expected to visit Dubai and Abu Dhabi this year alone. Abu Dhabi has estimated that 39 million tourists will arrive by 2030. Those numbers speak volumes,” he added.
While Iger indicated that there are currently no plans for an eighth park, he did mention the potential for future expansion as the company explores ways to accelerate growth through investment.
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The development of the Abu Dhabi park will be managed by the Miral Group.
The company’s first-quarter financial results also exceeded expectations, with a 7% revenue increase to $23.6 billion and adjusted earnings per share of $1.45. Disney has since revised its annual forecast upward to $5.75, an increase from the previous $5.30.
In addition, Disney has announced a $30 billion investment in its Florida and California theme parks, counteracting Universal’s planned expansion that includes the opening of a new park at Universal Orlando Resort in mid-May. This new theme park will be the largest to debut in the United States in two decades.
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Iger’s return to the CEO position follows a brief retirement period, re-entering the role amidst challenges faced by former CEO Bob Chapek, which included political disputes with Florida Governor Ron DeSantis concerning the “Don’t Say Gay” bill and internal discontent among employees. Additionally, Iger and his board triumphed in a proxy battle against activist investor Nelson Peltz, setting the stage for a renewed focus on core competencies.
“I want to thank our shareholders for their trust and confidence in our board and management,” Iger expressed in April 2024, emphasizing the company’s commitment to prioritizing “growth and value creation for our shareholders and creative excellence for our consumers” as the proxy battle concluded.
