DIS - With Solid Q1 Earnings Disney Could Be Ready For Its Next Leg Up

2024-02-13 10:21:58 ET

Summary

• Thanks to the bottom line beat in the FQ1'24 earnings, Disney has outperformed expectations, with the stock rallying by +21.3% since the January 2024 bottom of $89.
• We can understand why sentiment surrounding the stock continues to recover, with the management also raising dividends and reinstating $3B in share repurchase program for FY2024.
• DIS' growth is firing on all cylinders indeed, with all three of its segments likely to generate improved top/bottom lines, attributed to the robust demand for IP offerings.
• A moderate retracement may be necessary before adding, preferably at its previous trading range between $90s and $100s for an improved margin of safety.
• There have been tremendous improvements to DIS' intermediate to long-term prospects, as long as the company remains profitable, reverts to a growth mode, and achieves its ambitious goals.

We previously covered Walt Disney Company ( DIS ) in November 2023, discussing multiple uncertainties surrounding its near-term prospects, attributed to the expensive Hulu acquisition, restart of its content productions from December 2023, and reinstatement of dividends.

Despite this, we had recommended the stock as a Buy due to its highly attractive discounted valuations, with the robust IP flywheel suitable for growth-oriented investors looking for undervalued contrarian plays....

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