Jim Cramer Thinks These 10 Stocks Deserve Your Attention

4. The Walt Disney Company (NYSE:DIS)

Number of Hedge Fund Investors: 92

Jim Cramer wondered if the reason The Walt Disney Company (NYSE:DIS)’s stock has been stuck at around $90 a share has just been revealed. The New York Times recently published an in-depth article about the power struggle at The Walt Disney Company (NYSE:DIS) that began when CEO Bob Iger returned to lead the company nearly two years ago, replacing his chosen successor, Bob Chapek.

“Did we just find out why Club holding Disney ’s stock has been stuck at $90 a share? The New York Times published a deep dive into the power struggle at Disney that ensued as CEO Bob Iger returned to the top job almost two years ago, replacing his chosen successor Bob Chapek.”

A positive outlook on The Walt Disney Company (NYSE:DIS) is backed by its successful recovery efforts under CEO Bob Iger, effective cost-cutting, and strategic investments in streaming and theme parks. In Q3 2024, The Walt Disney Company (NYSE:DIS)’s streaming services—Disney+, ESPN+, and Hulu—became profitable, exceeding expectations due to actions like cracking down on password sharing and improving user experience.

Disney+ continues to grow despite higher subscription prices, now reaching 277 million subscribers and set for more expansion into fiscal 2025. The Walt Disney Company (NYSE:DIS)’s cost-cutting efforts have surpassed their $7.5 billion savings target, enhancing efficiency and allowing for share buybacks, which shows strong financial health and a commitment to shareholders.

Although domestic theme park attendance has decreased, international parks and cruise lines are performing well. The Walt Disney Company (NYSE:DIS)’s $60 billion investment in its Experiences segment over the next decade reflects confidence in long-term growth. Analysts are optimistic about The Walt Disney Company (NYSE:DIS)’s future, with price targets ranging from $104 to $130, driven by its strong intellectual property and strategic sports streaming moves.

Mar Vista Focus strategy stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter:

“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.”