KeyBanc Keeps Sector Weight Rating on Disney (DIS), Warns on Disney Parks

The Walt Disney Company (NYSE:DIS) is one of the 10 Best Stocks for 5 Years (Long-Term Stock Portfolio). On August 21, KeyBanc maintained its Sector Weight rating on The Walt Disney Company (NYSE:DIS).

KeyBanc’s analysis looked closely at Disney Cruise Line (DCL), which is operated by a subsidiary of The Walt Disney Company (NYSE:DIS) in the UK called “The Magical Cruise Company.”

The firm highlighted that DCL’s revenue in fiscal year 2024 was higher than pre-pandemic levels. This revenue made up about 7% of The Walt Disney Company’s (NYSE:DIS) Experiences segment revenue. DCL contributed around 1 percentage point to the segment’s growth in fiscal year 2024.

KeyBanc expects DCL’s revenue to double from fiscal year 2024 to fiscal year 2026 because of the addition of two cruise ships. The cruise line is expected to generate mid-to-high-teens yield.

However, KeyBanc noted that revenue from Domestic Experiences could make the Domestic Park growth look better than it really is. The firm believes competition will become tougher at Walt Disney World, with spending per visitor likely to slow down at Disneyland.

KeyBanc increased its forecast for The Walt Disney Company’s (NYSE:DIS) capital expenditure in fiscal year 2026. The firm noted that consensus estimates either expect too much contribution from DCL or not enough slowdown in the domestic parks’ performance.

The Walt Disney Company (NYSE:DIS) is an American multinational mass media and entertainment conglomerate that operates through 3 core business segments: Disney Entertainment, ESPN, and Disney Experiences.

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Disclosure: None. This article is originally published at Insider Monkey.