UBS has reiterated a Buy recommendation on Walt Disney Co. and left its price objective at $138.00, according to a research note published Tuesday. That target sits within the range of analyst expectations, with InvestingPro data indicating a consensus leaning toward "Strong Buy" and price targets spanning from $77 to $160.
In its update, UBS lowered its forecast for Disney's fiscal second-quarter operating income to $4.4 billion, down from a prior estimate of $4.9 billion. The firm said most of the reduction reflects timing shifts rather than changes to the company's underlying business trajectory. Over the last twelve months, Disney generated $19.42 billion in EBITDA, providing context to UBS's view of the firm's earnings power.
UBS reiterated confidence in Disney's capacity to sustain double-digit earnings per share growth. The research note pointed to multiple profit levers inside the direct-to-consumer segment as well as expected positive contributions from expanded cruise capacity and new attractions within the Experiences division. The firm's view of Disney's financial stability is underscored by recent performance metrics: diluted EPS of $6.85 over the last twelve months and analyst forecasts centered on $6.58 for fiscal 2026, per InvestingPro.
For the full year, UBS largely preserved its estimates. The firm continues to model fiscal 2026 revenues in excess of $102 billion and anticipates segment operating income of $19 billion, which would represent roughly 8% year-over-year growth. UBS slightly revised its EPS projections to $6.73 for fiscal 2026 and $7.88 for fiscal 2027, corresponding to growth rates of 13% and 17% respectively. Those projections are framed against recent company results showing 3.35% revenue growth and a 12% return on equity over the prior twelve months.
Valuation considerations were part of UBS's analysis. The note observed that Disney shares trade at about 16 times the firm's fiscal 2026 EPS estimate and near 13 times the 2027 estimate, versus the stock's historical average P/E of 18 times earnings. InvestingPro data cited in the note shows Disney trading at a price-to-earnings ratio of 15.07 and a notably low PEG ratio of 0.1, which UBS interprets as signaling potential undervaluation relative to expected growth. InvestingPro also highlights that the company has increased its dividend for three consecutive years and recorded dividend growth of 66.67% in the last twelve months.
The UBS note arrives amid other analyst moves and company-level leadership changes that have kept investors attentive. Walt Disney announced a management transition with Dana Walden named president and chief creative officer effective March 18, 2026, while Josh D'Amaro is assuming the role of chief executive officer, succeeding Robert A. Iger. These shifts coincide with varied broker responses to Disney's latest financials.
Following Disney's fiscal first-quarter results, JPMorgan maintained an Overweight rating and set a $138.00 price target despite concerns over contributions from Entertainment and Sports. Bank of America Securities trimmed its price target to $125.00 from $140.00 but retained a Buy rating, citing near-term performance worries within certain segments. KeyBanc kept a Sector Weight stance, acknowledging that domestic parks outperformed expectations while flagging continued challenges in attracting international visitors. Bernstein SocGen Group sustained an Outperform rating with a $129.00 target even after Disney shares declined in the immediate aftermath of the earnings report.
Together, these analyst actions and the reported corporate leadership transition have informed market assessments of Disney's near-term performance and longer-term strategic direction. UBS's view, as reflected in its Buy rating and $138 target, is that the company has multiple pathways to profitability gains and that its current valuation metrics may not fully reflect the projected earnings trajectory.
Contextual note: The figures and analyst stances referenced here reflect the data and commentary cited in UBS's research note and associated InvestingPro metrics as described above.