Media giant Disney (DIS) is having a bang-up year by any measure. It already has two billion-dollar-plus titles to its credit, and it is looking like a third may be in the works for later this year. While the traffic at its parks is proving to be a bit of a bust, its movies are performing wonderfully for the first time in a long time. And that actually did not help shares much, which are down fractionally in Thursday afternoon’s trading.
Disney has already had two big winners this year. Inside Out 2 just cleared $1.5 billion at the box office and is the highest-grossing animated movie ever. As in, all-time ever. Meanwhile, Disney followed it up with Deadpool & Wolverine, which saw the best domestic opening of an R-rated movie ever and is on track to surpass $1 billion.
Now, Disney has another potential blockbuster on the deck with the release of Moana 2. That’s a sequel that has been eagerly awaited since 2016. With Moana itself being the most-streamed movie of 2023, that’s a solid case for another big winner to come.
Cheaper Than the Parks
The simplest explanation for all this is that people’s pocketbooks are stretched to their limit, and cheap entertainment beats pricey entertainment hands down in such cases. So, that is where the win here comes from; people are more likely to shell out a few bucks for a movie rather than go to a Disney park, the price of which has been on a catastrophic rise for years.
In a move to, perhaps, take advantage of such a development, Disney is also planning a price hike for its streaming service. Since people are more likely to stream than they are to visit, it might be a good time to pursue that more low-hanging fruit.
Is Disney a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 20 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 1.87% loss in its share price over the past year, the average DIS price target of $127.71 per share implies 49.28% upside potential.
