Disney is upgraded to ‘buy’

Morgan Stanley analyst Alan Kassan upgraded his rating of Walt Disney Co. to “buy” from “hold.”

Kassan says Disney shares are selling at a discount to its peers based on cash flow and that its theme park and filmed entertainment businesses will get a boost next spring and summer.

On a valuation basis, Disney’s market capitalization is trading at about 11 times cash flow or earnings before interest, taxes and amortization.

Disney’s filmed entertainment should see a good return from animated feature “The Lion King,” set for June. And theme park attendance will get a boost from Disney-MGM Studios’ new ride, the Twilight Zone Tower of Terror.

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