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Analyst: Here’s why the force is with Disney

Earnings edge: Disney

The Magic Kingdom has certainly lived up to its name of late, at least as far as stock performance is concerned. Shares of Disney hit a new high ahead of the company's third quarter earnings report on Tuesday after the close.

Disney's enchanted ride could continue if the company manages to hit three key targets when it reports results, according to Cowen & Company senior research analyst Doug Creutz.

Disney is up nearly 30 percent this year, far outpacing the market and competitors like CNBC parent Comcast, Fox and CBS.

Creutz has a "market perform" rating and $98 price target on the stock. Tuesday morning, it was trading at $121.46.

When the company reports earnings, the first thing he'll be looking for is how the television advertising market is progressing. "It's been relatively slow recently," he told CNBC's "Fast Money," adding that "there's a lot of concern about digital media taking share."

The analyst wrote in a recent research note that the shift in advertising dollars to digital from TV will "likely persist for at least three to five years."

Next, Creutz said he'd be watching for any updates regarding ESPN's strength. "There's been a lot of scrutiny about ESPN's results recently," he said. "We do think that because they have long-term contracts locked in with both the cable companies and the sports leagues, some of these concerns are likely overblown."

In his note, Creutz said the sports channel is "relatively well positioned" against the threats faced by other networks because "sports programming is non-duplicable and is generally viewed live."

Lastly, Creutz said he would be looking for guidance on how the studio segment is performing. Despite the likelihood of a write-down on the disappointing adventure film "Tomorrowland," he said, the studio business continues to do well, spurred along by success from the latest "Avengers" movie.

Additionally, Creutz wrote in his note that the hotly anticipated release of "Star Wars: The Force Awakens" in December should allow Disney's studio "hot streak" to continue.

If Disney can deliver on advertising, ESPN strength and studio performance, Creutz said the stock will likely trend higher.