The Walt Disney Co. (DIS) is expanding its cruise business, a key part of the company’s experiences segment. The Disney Treasure, the media and entertainment conglomerate’s sixth ship, will embark on its maiden voyage on December 21. Disney’s Treasure cruise ship is designed to accommodate 4,000 passengers and 1,555 crew members, and its maiden voyage has sold out, with prices starting at $8,511 per person.
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DIS Is Expanding Its Cruise Business
Last week, in an interview with Good Morning America, Disney’s CEO Bob Iger explained that the Treasure cruise ship integrates the magic of Disney theme parks, recreating rides and stories to cater to families seeking a mostly all-inclusive vacation as an alternative to more expensive visits to its theme parks.
By 2031, Disney plans to launch seven additional ships, including the Disney Destiny and Disney Adventure in late 2025. Disney’s Experiences business includes its theme parks, consumer products, and cruise segments.
Can Disney’s Cruise Focus Pay Off?
Disney’s focus on its cruise line’s rapid growth has caught the attention of five-star-rated Morgan Stanley analyst Ben Swinburne. The analyst told Yahoo Finance that “these businesses have a higher return on invested capital than your average non-Disney cruise business,” citing strong returns due to high occupancy and revenue-per-room rates.
Furthermore, Swinburne estimates that this segment could generate $9 billion in revenue and $2.3 billion in operating income by 2032. He sees significant profit potential as Disney continues to scale its fleet.
Disney’s CFO Hugh Johnston recently projected 6% to 8% operating income growth for its experiences division next year, citing the Treasure ship as a catalyst. Swinburne echoed this optimism, projecting Disney’s cruise capacity will nearly double by 2026, potentially doubling cruise revenues between now and 2027.
The analyst has a Buy rating and a $125 price target on Disney stock, implying a 6.3% upside from current levels.
Is Disney a Buy, Sell or Hold?
Analysts remain bullish about DIS stock, with a Strong Buy consensus rating based on 15 Buys and five Holds. Over the past year, DIS has increased by more than 25%, and the average DIS price target of $124.29 implies an upside potential of 5.7% from current levels.
