Walt Disney Company (DIS) is likely to post double-digit earnings growth in fiscal Q3 on the back of strong demand at parks and improvement in direct-to-consumer segment profitability, UBS said in a Tuesday research note.

The brokerage modeled Q3 EPS of $1.59, a 13% rise from a year earlier, on revenue of $23.3 billion. For full-year 2025, analysts expect EPS of $5.89, according to the note.

UBS said it expects 4.8% revenue growth in Q3 for the experiences segment and earnings before interest and taxes for parks to rise 15% from a year earlier. Sports revenue is expected at $4.3 billion.

For Disney+, UBS expects a 1.6 million increase in subscribers during Q3 and a 6.7% DTC segment revenue growth. The company is on track to generate over $1 billion in DTC segment EBIT in 2025 despite higher tech and content spend, analysts wrote.

"We remain constructive on the outlook for F26 given underlying trends at the parks, new cruise capacity, strong content pipeline and inflecting margins in DTC with upside from full control of Hulu," UBS noted.

The brokerage said it reiterated its buy rating on the stock and boosted its price target to $138 per share from $120.

Price: 120.21, Change: +1.22, Percent Change: +1.03