9 Best Dow Stocks to Buy According to Analysts

5. The Walt Disney Company (NYSE:DIS)

Average Upside Potential as of October 23: 15.91%

Number of Hedge Fund Holders: 92

The Walt Disney Company (NYSE:DIS) is an entertainment company that produces and distributes film and television video streaming content. It also operates the world’s largest theme park business, accounting for over 30% of its revenues.

The Walt Disney Company (NYSE:DIS) has sought to alleviate concerns about its theme park business by announcing plans to invest $60 billion in the unit over the next 10 years. It plans to introduce four new cruise ships, lands, and rides across its global theme parks. In addition, the company is pursuing growth opportunities around content streaming with its Disney+ streaming service. The unit already has over 118 million subscribers, providing a new avenue for growth, especially in generating advertising revenues.

The Walt Disney Company (NYSE:DIS) is a well-known brand, and even though the state of the economy has an impact on its short-term prospects, there are many reasons to be hopeful about the long term, particularly if it can continue to turn a profit from its streaming business, which is a challenge for many media companies.

While trading at a price-to-earnings multiple of 18, The Walt Disney Company (NYSE:DIS) rewards investors with a 0.93% dividend yield. Additionally, analysts on Wall Street believe it is a strong buy with an average price target of  $112.13, implying a 15.91% upside potential.

In the second quarter, 92 hedge funds held positions in the company, collectively valuing their stakes at $4.76 billion. The substantial hedge fund interest underscores the company’s attractiveness as a stable and promising investment opportunity.

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.”