The next two years will be the best ever for Disney films, Goldman says

Key Points
  • Goldman Sachs reaffirmed its buy rating on Disney and added the media giant to its Americas conviction buy list.
  • The firm raised its forecast for Disney fiscal 2017 earnings per share to $6.05 from $5.87 versus the Wall Street consensus of $5.95.
A scene from Disney's "Beauty and the Beast."
Source: Walt Disney Pictures.

Investors should buy Disney because its movie studio will report back-to-back record earnings in the next two years, according to Goldman Sachs.

The bank added the media company to its Americas conviction buy list and reiterated its buy rating.

"Beauty and the Beast and a promising FY18 [fiscal year 2018] slate should drive record studio profits in FY17 and FY18. We expect FY18 to be DIS' best film slate ever with 4 Marvel films, 2 Star Wars film, and 3 animated films," analyst Drew Borst wrote in the note to clients late Monday. "Like Beauty and the Beast, all of these films have large consumer product opportunities which could drive upside at the studio and consumer products."

The analyst reaffirmed his Disney price target of $138, representing 22 percent upside from Tuesday's closing share price of $113.07.

Disney's movie slate

Source: Goldman Sachs

Borst cited how the social media traffic on Twitter for "Beauty and the Beast" is 22 percent higher in the 21 days post-release compared with the previous most-mentioned Disney film "Finding Dory."

"Beauty and the Beast should be tailwind to consumer product and studio content licensing based on its strong box office performance and positive consumer reactions," he wrote.

As a result, the analyst raised his Disney fiscal 2017 year earnings per share forecast to $6.05 from $5.87 versus the Wall Street consensus of $5.95.

— CNBC's Michael Bloom contributed to this story.