10 Undervalued Wide Moat Stocks to Buy According to Analysts

4) The Walt Disney Company (NYSE:DIS)

Average Upside Potential: 20.94%

Forward P/E Ratio (As of September 25): 17.86x

The Walt Disney Company (NYSE:DIS) operates as an entertainment company worldwide.

The company has a wide economic moat. This stems from the fact it is a conglomerate having a portfolio of treasured brands including Marvel, ESPN, Lucasfilm, and Pixar. These assets ensure that the company remains at the forefront of the entertainment world.

The Walt Disney Company (NYSE:DIS) continues to make significant investments in sports, scripted TV, and movies to aid its streaming platform and is targeting double-digit margins for Disney+. The company has its focus on making investments in sports and high-quality intellectual property (IP). Wall Street believes that the company’s advertising success is expected to be driven by a strong ad market and upfront results.

The future growth of The Walt Disney Company (NYSE:DIS) should stem from investments in the Experiences business, including cruise ships. Moreover, the company remains on track to achieve healthy double-digit margins for the direct-to-consumer segment. The Walt Disney Company (NYSE:DIS)’s licensing strategy continues to focus on monetizing its IP instead of licensing core IP. Therefore, the company’s strong content offerings and streaming services should aid its revenue and earnings growth in the upcoming quarters. Its focus is on driving incremental cost savings.

The Walt Disney Company (NYSE:DIS) released its new full-year adjusted EPS growth target of 30%. The company is on track for the profitability of its combined streaming businesses to improve in Q4 2024, with The Walt Disney Company (NYSE:DIS) expecting Entertainment DTC and ESPN+ to be profitable in Q4.

As per Wall Street, the shares of The Walt Disney Company (NYSE:DIS) have an average price target of $117.65. In Q2, 92 hedge funds held positions in the company, with a total stake valued at $4.76 billion.

Meridian Funds, managed by ArrowMark Partners, released its second quarter 2024 investor letter. Here is what the fund said:

“The Walt Disney Company (NYSE:DIS) operates a diversified entertainment business with theme parks, media networks, and streaming services. We own Disney because we believe its strong brand, valuable IP, and expanding streaming offerings will drive sustainable long-term growth. The company’s stock, however, underperformed in the quarter due to concerns about a slowdown in growth at its theme park division. While park revenue still grew by 10% year-over-year, management’s commentary suggested a moderation in post-pandemic demand and rising costs, leading to a disappointing outlook for park operating income in the second half of the year. This overshadowed the positive news that the company’s streaming segment, driven by strong subscriber growth at Disney+, reached profitability ahead of schedule. We held our position and will continue to monitor the performance of the theme park division.”