10 Best Bargain Stocks to Buy in May

2. The Walt Disney Company (NYSE:DIS)

Forward P/E as of April 11: ~15.5x

Average Upside Potential: ~53.1%

Number of Hedge Fund Holders: 108

The Walt Disney Company (NYSE:DIS) operates as an entertainment company. Bernstein analysts, led by Laurent Yoon, reiterated an “Outperform” rating on the company’s stock, maintaining a price objective of $120.00. The assessment highlighted the multifaceted nature of the company’s operations, which consist of Linear/Sports, Parks, and streaming segments, with each possessing unique challenges and opportunities. Over the mid-term, the firm anticipates The Walt Disney Company (NYSE:DIS) to witness margin expansion in its Direct-to-Consumer (DTC) segment and additional cruise ship capacity.

The Walt Disney Company (NYSE:DIS)’s vast and diverse content portfolio, consisting of strong franchises, offers a healthy foundation for fueling streaming subscriber growth and retention. The extensive library, together with its ability to develop new, high-quality content, places the company well amidst the competitive streaming landscape. A range of The Walt Disney Company (NYSE:DIS)’s franchises possesses worldwide popularity, aiding the international expansion of the streaming services. Furthermore, its content caters across age groups, which makes it suitable for family subscriptions and reducing churn.

ClearBridge Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:

“While we had already begun to shift toward a more defensive positioning entering the quarter, we made a number of adjustments in response to the rapid-fire developments in both economic and political policy. Among our largest new positions during the period was The Walt Disney Company (NYSE:DIS), as we believe that it has turned a corner on building out its streaming service, which should help margins inflect higher and help drive better earnings than the market currently anticipates. The shift in management’s strategy, from “market share growth at all costs” to a more focused approach on improving pricing should also help to improve both profitability and margins, and we believe that there remains meaningful upside compared to other streaming service providers at similar scale.”