Disney Named Top Large-Cap Growth Idea At Wells Fargo

Walt Disney Company (NYSE:DIS) shares rose 0.4% Tuesday after it was named Wells Fargo's "favorite large-cap growth idea for 2022."

Wells Fargo analyst Steven Cahall reiterated an overweight rating and raised the price target on the shares to $196.

Despite explaining that the past few months have shown Disney will face some "serious content obstacles" to meet FY24 subscriber guidance, the analyst is confident in the company being able to meet expectations.

"Given DIS's history in delivering the content goods, we think it's an attractive setup, so it's our favorite large-cap growth idea for 2022,” explained Cahall in a client note.

Cahall continued by saying that for Netflix (NASDAQ:NFLX) every $2 billion or more in content amortization equals 25 million net adds historically. 

"DIS's step-up in content suggests that amort growth will be at least that punchy. And, while we can't quantify the content value going to general entertainment (GE), we remind investors that DIS bought 21st Century Fox specifically to address its lack of prowess in content outside its core genres. So, we think DIS knows its weaknesses and will be throwing everything and the kitchen sink at it," added the analyst.

© Investing. Copyright and all rights therein are retained by authors.