Wall Street initially applauded Walt Disney's latest earnings report and conference call , but the stock has languished in the days since. An analyst at J.P. Morgan now sees 25% upside ahead.

J.P. Morgan analyst Philip Cusick resumed coverage of Disney stock (ticker: DIS) at Overweight with a $135 December 2023 price target in a note on Monday. He had the same price target and rating until Jan. 12, when he temporarily suspended rating the stock due to a period of restriction.

J.P. Morgan and/or its affiliates were acting as a financial advisor in connection with Disney's response to an activist campaign launched by Nelson Peltz's Trian Partners. Trian ended the campaign last week.

"Our Overweight rating is driven by continued strength at Disney's theme-park segment—domestically and internationally—despite a potential slowdown due to macro uncertainty," Cusick wrote.

Disney stock surged more than 7% in after-hours trading following the media and entertainment firm's fiscal-first-quarter earnings report—especially after Iger on the earnings call laid out plans to lay off 7,000 employees, implement $5.5 billion in cost cuts, and to ask the board to bring back the dividend by the end of the calendar year. Wall Street analysts gushed about the firm's improved profitability prospects. Peltz then called off the battle , arguing that Disney had aligned itself with his firm's thinking.

There's been some profit-taking in the shares since. Disney stock Is flat at $107.94 in Monday afternoon trading, down 3.4% from where it closed prior to the earnings report on Wednesday.

Still, Cusick thinks Iger's plans for the firm can drive shareholder returns, as the firm looks to focus on profitability in its direct-to-consumer segment, which includes its streaming assets. Cusick is also upbeat about organizational changes that Iger hopes will empower creatives at the firm. He said the firm's decision to pull its fiscal 2024 subscriber guidance is understandable, given the focus on profits.

"While we are cautious on the media landscape overall due to sustained streaming losses and advertising headwinds," Cusick wrote, "Disney is our favorite name among the group due to the company's strong asset mix and what we expect to be a rapid decline in streaming losses in the next year."

Though Disney hasn't set the exact timing and size of the potential dividend, the analyst models it as $1 a share for fiscal 2024.