On Thursday morning, Disney shares were one of the biggest decliners on the Dow Jones index on the New York Stock Exchange, penalized by a note from Jefferies, which initiated its coverage of the stock with a 'hold' recommendation.

Half an hour after opening, the stock was down 0.2%, while the Dow was up 0.1% at the same time.

In a note, the broker said it was optimistic about the American media and entertainment giant's DTC business, which includes the Disney+ video-on-demand platform.

In its view, the decision to combine offerings, raise prices, use advertising revenues, invest in content and exercise cost discipline should pay off in terms of profit margins between now and 2026.

The broker is more cautious, however, about the outlook for the theme park division, which expects business to accelerate in the second half of the current 2024/2025 financial year.

Jefferies also notes that recent theme park sales growth has been driven more by price increases (+5%) than by growth in attendance volume (+2%).

Its target price is $120.

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