Analyst Optimistic about Disney Stock Reaching $145 Price Target, Is It a Good Buy at Current Price of $121?

Disney's parks are booming

There's one part of the company that's booming. While Walt Disney (NYSE: DIS) faces down more than its fair share of challenges, one part of the business that's working is its iconic parks. Analysts at Bank of America kicked off the week by maintaining a buy rating on Disney stock and bumping up the price target to $145. This new price target represents an upside over the next 12 months or so of about 19.5% from the current stock price.

The BofA analysts justified the price target bump by honing in on Disney's park performance.

• The experiences segment, which includes parks and cruise ships, grew revenue by 7% year over year in Disney's fiscal first quarter.
• Segment operating income grew slightly faster at 8%.

Still plenty of obstacles

While Disney's parks continue to draw in crowds, the company's streaming business remains unprofitable, its movie business is no longer a can't-miss blockbuster factory, and the company's efforts to adapt its sports business to the age of streaming remain a work in progress.

On top of all that, Disney faces a proxy battle with activist investor Nelson Peltz. The company's annual shareholder meeting on Wednesday could turn into a spectacle if Disney's slate of board nominees don't receive enough support from investors.

Conclusion

Disney stock doesn't look cheap, trading for about 26 times earnings guidance. However, investors shouldn't underestimate the company's ability to grow the bottom line dramatically over the next few years. Rising profits could lift the stock well above $145 in the long run.