10 Best Leisure and Recreation Services Stocks to Buy Now

2. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 76

The Walt Disney Company (NYSE:DIS) is most recognized for its vacation spots, which include its own cruise line, amusement parks, and hotels located on three continents. The business also operates streaming, merchandising, television, and movies.

Diversification helps the company deal with challenging periods, such as the COVID-19 epidemic. Disney was still able to make enormous amounts of revenue even after its theme parks closed. It has had great success with its streaming service portfolio.

Disney+ is the crown jewel, with over 150 million paid subscribers. The company also owns ESPN+ and Hulu. Over 220 million individuals use its streaming services globally.

Throughout the year, the company has suffered with the headwinds affecting the larger media business. These challenges include declining legacy media asset prices and difficulties in the online streaming business as a result of Netflix’s dominant position. In Q1 of 2024, The Walt Disney Company (NYSE:DIS) had a 22% decline in operating income, which was caused by an 8% decline in revenue. Nonetheless, the company seems to be effectively improving its situation. For the first time, its streaming division turned a profit in Q3 of 2024 ($47 million).

The Walt Disney Company’s Q4 2024 revenues increased by 6% to $22.6 billion from $21.2 billion in the same quarter the previous year. Revenues for the entire year increased by 3% to $91.4 billion from $88.9 billion the year before. Disney’s operating income from its Entertainment division increased by 23% in the fourth quarter of 2024, while its DTC streaming operations witnessed a 14% gain in ad revenue. Additionally, the Experiences segment recorded record revenue for the whole year, with a 1% increase in Q4 2024 sales. In addition, ESPN’s domestic ad revenue jumped by 7% YoY in Q4 of 2024.

Rosenblatt maintained its Buy recommendation on The Walt Disney Company (NYSE:DIS) shares and increased the price objective from $122 to $135. In a research note, the analyst informs investors that the company’s “build up for growth,” as described by Disney’s CFO during a media conference last week, “looks doable — especially given recent momentum.” According to the company, this justifies a more positive assessment of the shares’ value. In a research note, the analyst informs investors that a re-rating for Disney can be bolstered by growing confidence in the company’s growth trajectory and portfolio durability, as well as a decreased concern about exposure to secular pressures on linear TV and competition in streaming.

Ken Griffin’s Citadel Investment Group was the largest stakeholder in the firm from among the funds in Insider Monkey’s database. It owns 10.08 million shares worth $970.35 million as of Q3.