The Walt Disney Company (DIS): A Bull Case Theory

We came across a bullish thesis on The Walt Disney Company (DIS) on Investing Intel’s Substack. In this article, we will summarize the bulls’ thesis on DIS. The Walt Disney Company (DIS)’s share was trading at $109.72 as of 23rd May. DIS’s trailing and forward P/E were 22.39 and 19.30 respectively according to Yahoo Finance.

The Walt Disney Company (DIS): Among Advertising & Media Stocks That Could Tank If Recession Hits

Disney’s stock surged following a strong earnings report that beat analyst expectations on both revenue and profits, driven by the company’s streaming services—Disney+ and Hulu—achieving profitability. This marked a key milestone, signaling a shift toward a more sustainable and profitable business model. The company also announced plans to launch a new theme park in Abu Dhabi, its first in the Middle East, operated by a local partner, underscoring Disney’s strategy to expand its global footprint.

Alongside these positive developments, Disney raised its full-year profit outlook, reflecting management’s confidence in continued growth. Despite the stock being down 4% year-to-date, this combination of beating forecasts, profitable streaming momentum, and global expansion has reignited investor optimism. The upgraded guidance and fresh catalysts suggest the potential for a sustained upward trend in the stock price, presenting a compelling investment opportunity amid broader market uncertainties.

Previously, we have covered The Walt Disney Company (DIS) in October 2024, wherein we summarized a bullish thesis by Johnson Equity Analysis on Substack. The author recognized the company for its strong market position across entertainment, sports, and experiences, with significant revenue growth from $67.4 billion in 2021 to $90 billion trailing twelve months.

Despite challenges in streaming and movie profitability, Disney’s streaming business turned profitable in Q3 2024, parks segment showed robust operating income growth, and strategic investments signaled long-term growth potential. Analysts projected a substantial rebound in free cash flow and a target share price of $360.53 by 2035, implying strong upside and a 14.3% CAGR if Disney successfully executed its content and operational strategies. Since our last coverage, the stock is up 16.56%.

The Walt Disney Company (DIS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held DIS at the end of the first quarter which was 108 in the previous quarter. While we acknowledge the risk and potential of DIS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.