Walt Disney Co (DIS)

[Monksdream]

Stocks
Barron's mentions: Disney (DIS) made the cover this week, with the stock highlighted as being on the rebound. The House of Mouse is said to be back on track toward strong profitability after cutting costs, canceling shows, and redirecting strategy. On a valuation check, the stock was called cheap based on a sum-of-the-parts analysis. The brightest spot in Disney’s portfolio was noted to be the theme parks, cruises, and consumer products businesses, which represented more than a third of revenue last fiscal year and two-thirds of operating profits. Those businesses were noted to have benefited from pent-up demand for travel and experiences by consumers in the U.S. and abroad, which has kept attendance high and given Disney strong pricing power. Underscoring that point, Disney management recently noted that per capita spending at Disney’s parks is more than 40% higher than in 2019, thanks to premium offerings like Genie+ and Lightning Lane. In the long term, Disney's direct-to-consumer business is expected to look more like Netflix’s (NFLX), which is about 50% larger in streaming currently and boasts an operating profit margin of nearly 20%. Adding it all up, the recommendation is to buy Disney on the cheap.