Bullish Prospects Unlikely to Disappoint By TipRanks
The Walt Disney Company (NYSE:) has been trading on the New York Stock Exchange since 1957. The stock operates with numerous businesses and is considered a leader in entertainment and media stocks.
DIS stock, despite a strong customer base and loyal investor, has come under increasing pressure the past few years.
The pandemic caused a great deal of chaos in DIS stock. Many core assets were shut down due to pandemic-related restrictions. In 2020 and beyond, revenues from Disney parks, cruises and other hospitality businesses were flat.
The tides are turning however, and in big ways. The core parks division of Disney enjoyed a quarter that saw an impressive profit, which surprised even most bearish analysts.
From a long-term perspective, I am still extremely bullish about DIS stock. (See Disney stock charts on TipRanks)
Continued Growth Impressive
The investors may have considered this quarter a transition period to be profitable and reach 2019 performance levels. But, Disney’s core brand was strong and its product offerings were excellent. To put it mildly, Disney saw an unexpected surge in visitor numbers at its core parks.
This top and bottom line surge propelled revenues to reach $17 billion this past quarter. It’s a stunning recovery given the 93% decline in revenue Disney witnessed in the third quarter last year as compared to 2019.
Pandemic-related outbreaks remain at risk in many theme parks and cruise companies. We are seeing more dangerous and more widespread variants of the disease than ever before.
It is clear that Disney has a strong commitment to protecting its guests. It’s a company that has done all right so far and most people expect it to continue doing so.
Media and Entertainment Sector Offers Rich Opportunities
The key driver of Disney’s stock-price performance has been important. As a catalyst, investors have been increasingly focusing on the streaming business of this company.
The timing of Disney’s Disney+ streaming service launch at the height of the pandemic was perfect.
It has achieved some remarkable feats with its streaming services. Disney’s subscriber growth was so rapid that it took Netflix (NASDAQ: 10 years) to achieve. Perhaps that is not surprising given Disney’s high-quality brand and loyal customer base.
This kind of growth is however quite surprising to many.
Disney expects to expand its current base of 116 million subscribers to 300-350 million by 2024. These growth catalysts will come from international markets, with Disney focusing on Latin America first.
Disney+ produced many blockbuster series, including those from Marvel. Black Widow became the highest-grossing movie since the pandemic, bringing Disney+ $125 million. This success of Disney’s streaming platforms contributed $12.7 billion to the company’s total revenue, which grew 18% in the last quarter alone.
Disney’s theme parks are now open, cruises are sailing, and so is the company’s stock price. The revenue of a division that suffered huge losses in 2020 is now four times higher in the third quarter. The Parks, Resorts and Products segment reported revenue of $4.3 billion.
Wall Street Take
As per the TipRanks’ analysts rating consensus, Walt Disney is a Strong Buy. There are seven Buy recommendations and three Hold recommendations out of the 20 analysts’ ratings.
The average Disney price target is $217.26. The price targets of analysts range from $263 to $185 per shares, with the highest being at $263.
The Bottom Line
Walt Disney is still the number one media stock. The stock price of this company has the potential to go even though it’s still in recovery.
Although the market is in risk mode lately, Disney continues to be one of the best long-term core-growth holdings.
Disclosure: Chris MacDonald didn’t hold any positions in the securities listed in this article at the time it was published.
Disclaimer: Information in this article does not necessarily reflect those of TipRanks. TipRanks cannot guarantee the reliability, completeness or accuracy of any information. The article does not constitute a solicitation or recommendation to buy or sell securities. This article is not intended to provide advice on legal, professional investment or financial matters. TipRanks or its affiliates are not responsible for the contents of this article. Any action you take based on the information is your responsibility. TipRanks’ or any affiliates does not endorse this article or make it a recommendation. The past performance of TipRanks or its affiliates is not an indication of future prices, results, or performances.