I'm sure many observers believe Disney is gearing up for a prosperous 2010. If you pull up a one-year chart over at AOL quotes, you'll note the remarkable uptrend the shares have been in; this uptrend is not only appealing to traders, but to investors as well. Investors like me.
I'm an investor who has been in the stock for a long time (since 1998) and I'll be blunt about one thing: reaching $38 per share, while a fairly profitable number for me, isn't wholly impressive. I want Disney to finally break through into the $40+ level. That would show me that long-term resistance has a chance of finally being broken.
Do I agree with this price target? Do I actually think Disney is about to experience a significant movement in value? I always have my doubts when it comes to positive analyst coverage on this company. I've been disappointed way too many times in the past.
Disney, like Time Warner (TWX), General Electric's (GE) NBC Universal, and News Corp. (NWS), still has a plethora of challenges to face in the new year. Advertising is coming back, yes, but it needs to stay on track. Consumers aren't embracing the DVD format like they once did. And budgets for content development and marketing remain irrational given current economic reality.
As this piece from Dividend.com mentions, Marvel (MVL) is playing a role in the new price expectation. Marvel certainly will act as a catalyst. But will the acquisition be enough to keep shares heading above $40, and maybe into the wonderful world of $50+?
Again, I'm skeptical, and I should remind everyone that UBS is only saying $38 per share. However, price targets don't mean much to long-term investors. We want sustainable trends. Also, we want dividend increases. Unfortunately, Disney announced 35 cents per share for its latest annual payout. The exact same amount as last year's payout.
Can't wait to see what happens with Disney. I hope a new bull run, one that lasts for years, is about to commence. I will not, however, allow myself to get too excited by this latest dispatch from Wall Street.
Disclosure: I own Disney, GE; positions can change without notice.