Disney shares rise after Barclays upgrades rating, citing company's pivot to streaming

  • Barclays bumps up its rating on Disney shares to overweight from equal weight.
  • The firm thinks Disney's shift to provide an over-the-top media service will be a new spark for growth.
  • Barclays raises its price target on shares of Disney to $130 a share from $105 a share.
Chief executive officer and chairman of The Walt Disney Company Bob Iger walks on the floor of the New York Stock Exchange (NYSE) before ringing the opening bell, November 27, 2017 in New York City.
Getty Images
Chief executive officer and chairman of The Walt Disney Company Bob Iger walks on the floor of the New York Stock Exchange (NYSE) before ringing the opening bell, November 27, 2017 in New York City.

Barclays bumped up its rating on Disney shares to overweight from equal weight on Friday, pointing to the company's shift to provide an over-the-top media service as a new spark for growth.

"We believe the company has the key mix of assets to be successful and the opportunity from this pivot could be substantial," Barclays analyst Kannan Venkateshwar said in a note. "We believe Disney's Investor Day could prove to be a catalyst to frame the scale of the opportunity and help the company build a credible terminal value 'story' around the stock."

Disney's investor day is expected to be early next year and "should not only give investors a sense of the scale of Disney's ambitions but also help remove a persistent speculation about the scale of earnings downside from new businesses," Venkateshwar said.

Barclays raised its price target on shares of Disney to $130 a share from $105 a share. Disney stock rose 1.5 percent in premarket trading from Thursday's close of $116.18 a share.

WATCH:Netflix shares are up 2,400 percent and the rest of the media industry is struggling — here's why