DB Alex Brown Raises Disney to Buy

Analyst Douglas Mitchelson says he sees 32% upside potential to his $25 price target

Deutsche Banc Alex. Brown upgrades Disney (DIS ) stock to buy from market perform.

Analyst Douglas Mitchelson says he sees 32% upside potential to his $25 12-month price target. He says the company is positioned to receive the greatest benefit from a turn in the economy, given its greater exposure to both cyclical businesses and the fallout from attacks.

Mitchelson thinks the shift from negative 5% growth could add well over $1 billion to earnings before interest, tax, depreciation and amortization. He says his concerns regarding operations have been addressed in management's new, lower guidance. Lastly, he notes the company's recent stock price underperformance has brought valuation in line with other media stocks.

Media stocks usually find support at 60% of asset value, or $17 in Disney's case, the analyst notes.

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