BofA notes that Disney’s (DIS) Experiences segment is currently the largest contributor of operating income and cash flows and has been challenged recently, but the firm projects fiscal Q2 will reflect a sequential improvement in the Experiences segment operating income, which will subsequently accelerate in Q3 and Q4, aided by easier comps and the contribution of a new cruise ship that should be profitable in its first full quarter. Following strong fiscal Q1 results, there was increased confidence in Disney’s ability to hit, if not potentially exceed, their FY25 outlook and while recent macro uncertainty adds risks, the firm does not see signs of underlying fundamentals coming under pressure, says the analyst, who reiterates a Buy rating and $140 price target on Disney shares.
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