Goldman Sachs said investors should buy Walt Disney Co. stock because its movie studio will report back-to-back record earnings in the next two years.
Goldman also reaffirmed its buy rating on Disney and added the media giant to its Americas conviction buy list.
The firm raised its forecast for Disney fiscal 2017 earnings per share to $6.05 from $5.87 versus the Wall Street consensus of $5.95.
"Beauty and the Beast and a promising FY18 [fiscal year 2018] slate should drive record studio profits in FY17 and FY18. We expect FY18 to be DIS' best film slate ever with 4 Marvel films, 2 Star Wars film, and 3 animated films," analyst Drew Borst wrote in the note to clients late Monday, CNBC.com reported.
"Like Beauty and the Beast, all of these films have large consumer product opportunities which could drive upside at the studio and consumer products."
The analyst reaffirmed his Disney price target of $138, a 23 percent jump from Monday's close.
Disney officials recently predicted renewed growth for this year and beyond after a rare stumble in the fiscal fourth quarter.
The Burbank, California-based company forecast modest earnings per-share growth in fiscal 2017 just getting under way, with Chief Executive Officer Bob Iger promising 2018 would be even faster. Disney blamed lower quarterly sales and profit partly on its fiscal calendar, saying the just-ended period was one week shorter. Profit was also hurt by a drop in advertising at ESPN.
“We fully expect to return to more robust growth in fiscal 2018 and beyond,” Iger said on a call with investors, citing an upcoming movie slate that includes Marvel movies, animated films and new “Star Wars” releases, Bloomberg reported.
(Newsmax wires services contributed to this report)