5 Stocks Most Vulnerable to Recession

1. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Holders: 113

The Walt Disney Company (NYSE:DIS) is a California-based mass media and entertainment giant.

On July 14, Kannan Venkateshwar at Barclays reduced the price target on The Walt Disney Company (NYSE:DIS) from $130 to $120 and reiterated an Equal Weight rating on the stock. The analyst expects modification in the guidance structure from some media companies due to a weakening in ad spending growth. Venkateshwar also anticipates the guidance of The Walt Disney Company (NYSE:DIS) to be revised to incorporate the impact of losing digital rights to broadcast Indian cricket globally.

The Walt Disney Company (NYSE:DIS) stock has lost over 35% of its value since the start of the year. The company’s debt levels are at an all-time high, making it susceptible to the burden of high-interest expenses in the future. Furthermore, The Walt Disney Company (NYSE:DIS) appears overvalued, with an elevated EV/EBITDA and a PE ratio of 62.55 as of July 15.

Here’s what Harding Loevner said about The Walt Disney Company (NYSE:DIS) in its Q1 2022 investor letter:

“The war in Ukraine has given new urgency to the question of whether globalization has reached a tipping point and if the familiar web of decentralized, just-in-time, global supply chains will be a casualty of the inward turn dividing countries into competing trading blocs. It is probably too soon to know. We sold Disney (NYSE:DIS), due to some concerns about the increasing capital intensity of its business amid signs of rising competition and slowing growth in streaming media consumption.”

As of Q1 2022, 113 hedge funds held a stake in The Walt Disney Company (NYSE:DIS), with a cumulative stake worth over $5 billion.

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