Goldman Sachs offers plenty of reasons to like Disney in the years ahead. But Jim Cramer expects the near-term road to remain choppy for the stock.
Disney picked up an endorsement from a top Wall Street firm — but Jim Cramer said the analysts' reasons to buy are not enough to drive the stock higher. Goldman Sachs initiated coverage of Disney with a buy rating and $125-per-share price target, implying more than 22% upside from where the stock closed Monday. The analysts wisely touted Disney's theme-park business as a source of growth in the years ahead and a competitive advantage in a transitioning media industry.
On the Entertainment side, Disney's $60 billion theme parks expansion should fuel growth outside of the crowded streaming landscape, Goldman told clients. While we welcome Goldman's positive multiyear outlook for key Disney businesses, it does not change the fact the stock has struggled to gain traction since Nelson Peltz's unsuccessful proxy fight ended in early April. Its May 7 earnings release sent the stock tumbling, erasing brief momentum in the days leading up to the report.
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