12 Most Undervalued Travel Stocks to Buy According to Hedge Funds

2) The Walt Disney Company (NYSE:DIS)

Forward P/E Ratio as of 13 September: 16.98x

Number of Hedge Funds: 92

The Walt Disney Company (NYSE:DIS) has theme parks and hotels which are categorized as the world’s premier vacation destinations. Its cruise ships remain popular and provide family-themed voyages.

Wall Street analysts believe that the company’s ownership of timeless characters and franchises, together with its ability to create and attract top-tier content should act as critical tailwinds. In the long term, considering the company’s market share and industry-leading characters, market experts believe that consumers should return to its movies, parks, and merchandise.

Moving forward, The Walt Disney Company (NYSE:DIS) plans to make robust investments in the United Kingdom and continental Europe. These should focus on producing movies and television shows for the big screen and streaming platform, Disney+.

Recently, Disney Cruise Line announced an order for 4 ships, which are expected to be delivered between 2027 and 2031. These are in addition to the 4 additional vessels which are already set to make a debut. Therefore, in the next 7 years, these eight vessels are expected to more than double the company’s 5-ship fleet. It seems that The Walt Disney Company (NYSE:DIS) has been betting big on its vacation-at-sea business. Amidst record bookings and demands across 2024, the company plans to exploit the market opportunity.

Since the cruise ships have the ability to pay back very quickly, the company remains optimistic about its investments in this business. The company has seen healthy demand in its cruise arm, with onboard spending witnessing an increase across the summer months.

As per Wall Street analysts, the average price target on the shares of The Walt Disney Company (NYSE:DIS) stood at $118.17. In 2Q 2024, 92 hedge funds held positions in the stock.

 Mar Vista Investment Partners, LLC, an investment management company, released second quarter 2024 investor letter. Here is what the fund said:

“The Walt Disney Company’s (NYSE:DIS) shares declined after its earnings release, even though the company exceeded recently upgraded financial forecasts. While Disney+ and Hulu reached a milestone by turning their first quarterly profit, the company cautioned about theme park attendance returning to pre-pandemic norms. This signals a deceleration following a period of exceptional growth, impacting the stock as theme parks and experiences account for roughly 60% of Disney’s earnings. Despite broader consumer worries, Disney’s stock is still trading with a significant discount to fair value. We expect the gap between Disney’s market price and its intrinsic value to shrink as its streaming division evolves and increases profitability over time.”