Walt Disney (DIS) reported stronger-than-expected fiscal Q2 revenue growth, fueled by surging demand at its US theme parks and record advertising performance from ESPN, Morgan Stanley said in a report Thursday.

Disney's revenue rose 7% year-over-year, beating expectations, as strong US park performance, higher per capita spending, increased attendance, and solid bookings, along with momentum from the new Disney Treasure cruise ship, drove growth, the report said.

The strong results prompted Disney to raise its full-year 2025 adjusted earnings per share guidance to 16%, up from its previous high single-digit percentage forecast, Morgan Stanley said.

Despite broader economic concerns, analysts at Morgan Stanley noted that macro risks remain largely discounted in Disney's stock. The company now forecasts $7 in adjusted earnings per share for fiscal 2027, approaching its $155 bull case valuation. Its revised fiscal 2025 guidance calls for 16% adjusted EPS growth, up from high single digits, the report said.

Disney expects its investments in cruise ships, park attractions, and streaming to drive double-digit earnings growth through 2027, though macroeconomic uncertainties continue to cloud its long-term outlook, the report said.

Morgan Stanley has an overweight rating on Disney and raised its price target to $120 from $110.

Shares of Disney were up more than 2% in recent Thursday trading.

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