DIS - Disney Stock: I Expect More Upside

2024-04-18 14:25:20 ET

Summary

• The Walt Disney Company stock is still a buy despite recent price rallies.
• Its current P/E is still reasonable and is expected to shrink quickly due to EPS growth.
• Analysts expect Disney's EPS to grow at a CAGR of over 10% over the next 5 years.
• I see good catalysts to support such projection, including Disney+, cost-cut initiatives, and asset utilization recovery.

DIS is still a BUY despite large price rallies

In my last article , I argued for a strong buy thesis on The Walt Disney Company (DIS). The key catalyst I saw at that time (see the chart below) was that:

…with the Hollywood Writer strike over and a new 3-year agreement in place, many of the uncertainties the company was facing in the recent past have been removed. I saw limited impacts of the new agreement on Disney stock, and its current P/E implies the market is overestimating these impacts.

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