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These reports, excerpted and edited by Barron’s, were issued recently by investment and research firms. The reports are a sampling of analysts’ thinking; they should not be considered the views or recommendations of Barron’s.

Walt Disney

• DIS-NYSE

Overweight • Price $82.56 on Sept. 21

by J.P. Morgan

Walt Disney hosted a parks-focused analyst meeting at Walt Disney World, where speakers included CEO Bob Iger, Disney Parks, Experiences and Products Chairman Josh D’Amaro, and ESPN Chairman Jimmy Pitaro, as well as a number of other executives. We appreciated the breadth of content and detail on the DPEP business, and agree that there is a long runway going forward.

On the stock, we have found investors mostly on the sidelines this year as the company works to define its strategic future, but like shares at this level and expect in the next six to 12 months that major questions around Hulu, an ESPN investment, and a linear sale (or not) will be answered, which should give investors more confidence in long-term value creation at the company.

While Iger did not address the pending resumption of the dividend directly, his closing comments seemed to imply that there is still room for shareholder returns even under a heavier capital-expenditure investment level.

We remain Overweight with a $125 target, though we recognize it could take a couple of quarters before we have better clarity into the company’s direction and shares begin to work.

Cisco Systems

• CSCO-Nasdaq

Outperform • Price $55.50 on Sept. 21

by Evercore ISI

Cisco announced its intention to acquire

Splunk

for $28 billion. Cisco noted several key points related to the deal:

1) The deal integrates two leaders with complimentary capabilities in AI, security, and full stack observability—Cisco can offer end-to-end security solutions from threat detection to prevention to resolution.

2) Should result in Cisco adding $4 billion in annual recurring revenue run-rate postdeal (stand-alone Cisco is at $24.3 billion).

3) Deal will be cash flow accretive in year one, and in year two will be cash-flow and EPS accretive.

4) Deal should close by the third quarter of 2024.

5) Doesn’t change Cisco’s capital return program on buybacks or dividends. Net/net: We think the deal should be 20 cents accretive in year two and also bolster its revenue and margin profile going forward.But we do think a debate will now emerge on why now, and what are they seeing in their core markets that is resulting in a deal in this environment.

Sticking with our Outperform rating and $63 price target.

Walmart

• WMT-NYSE

Buy • Price $163.91 on Sept. 21

by UBS

The bullish investment case for the world’s largest retailer is as good as it has been in a while. During a couple of days of meetings with the company’s senior leadership team, the inflection was apparent in obvious and subtle ways.

Overtly, Walmart’s CEO noted that shareholders have been patient for some time as the company made investments, and its time for that patience to be rewarded. Below the surface, there was consistency, balance, and excitement in the messages across the team. Most likely, this was a function of Walmart’s confidence in its opportunity. Walmart’s leaders have long used words like purpose, mission, and values during conversations with the investment community.

While these concepts were still sprinkled throughout, there was new vernacular dropped frequently, such as “perfect order,” “first-place share,” and “move fast.” These words matter because they not only reflect a different mind-set for the company from 10 years ago, but they also demonstrate the degree to which Walmart is seeing evidence that its plan is working.

For investors, we believe that this means Walmart’s shares can generate alpha for some time to come. Price target: $190.

Nike

• NKE -NYSE

Outperform • Price $94.62 on Sept. 21

by Oppenheimer

We reiterate our Outperform rating and 12 to 18 month price target of $150 on Nike. Nike is set to announce first-quarter (Aug.) results on Sep. 28, after the market close. We reviewed carefully Nike and sector data points. As we consider Nike into upcoming results and over the next several quarters, a few key factors keep us positive on shares: 1) signals of continued solid

demand across athleisure, 2) now rationalized channel inventories, 3) prospects for waning sourcing costs, 4) appropriately subdued guidance and Street forecasts, and 5) historically discounted share valuation. In many ways, Nike represents a classic “wall of worry” type name. Nike ranks as a top large-cap pick within our Consumer Growth & eCommerce coverage.

IBM

• IBM-NYSE

Outperform • Price $146.52 on Sept. 20

by RBC Capital Markets

In the time we’ve spent with and around IBM, we are impressed with the depth of the company’s software platform, particularly its capabilities around enablement.

In a postpandemic world, we’ve seen networks broaden and become increasingly complex. IBM combines consulting and software solutions, particularly those provided by Red Hat, to bring a unique set of assets to pull large enterprises through their digital transformation journeys.

We feel this same dynamic could lead to another leg of growth for automation, certainly in terms of generative artificial intelligence, but also a renewed interest in the broader Watson suite in a macro that is valuing return on investment and time to value. We initiate with an Outperform rating and a $188 price target based on our sum-of-the-parts valuation framework.

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