Disney (NYSE: DIS) is a family-friendly global theme park and digital entertainment company. I am bullish on the stock.
Even though it represents a world-famous company, DIS stock hasn't satisfied many of its investors over the past year. In fact, a buy-and-hold strategy lost money with Disney stock in 2021.
That's disappointing, but value hunters should perk up at the thought of investing in a giant, iconic company like Disney at a bargain price. Besides, stocks that lag for a full year can sometimes rip higher when you least expect it.
DIS stock touched $200 briefly in 2021 -- and if the conditions are right, maybe the stock can revisit that price point in the coming months.
Poised to Dominate Box Office
You might associate Disney with its famous theme parks, but there's more to the company as it's also a maker of movie magic.
We're not just talking about kids' cartoon films here, either (though children's movies can actually be quite lucrative). Disney actually has a slew of highly anticipated film releases scheduled for the coming year, which could provide a strong boost to the company's bottom line.
As evidence of this, Fandango issued the results of an audience survey of the most anticipated upcoming blockbuster film releases. At the No. 1 spot is Disney-produced Black Panther: Wakanda Forever.
Disney also co-produced the No. 2 film on the list, Spider-Man: Across the Spider-Verse (Part One) with Sony.
On top of all that, Disney held the No. 4 spot with Thor: Love and Thunder, as well as the No. 6 spot with Doctor Strange in the Multiverse of Madness, while Disney subsidiary 20th Century Studios took No. 7 with Avatar 2.
Furthermore, the Fandango survey found that 94% of the respondents want to go to theaters more often in 2022 than they did in 2021. Therefore, the coming year could be a resounding cinematic success for Disney.
Not Such a Bad Year
Judging by the subpar performance of DIS stock in 2021, you might be led to believe that Disney had a terrible year.
However, in a conference call, CEO Bob Chapek was quick to point out that Disney actually performed well, fiscally speaking.
As Chapek explained, Disney overcame the "many ongoing challenges" of the COVID-19 pandemic and ended the fourth fiscal quarter with adjusted earnings per share (EPS) of $0.37.
That's a major improvement compared to the loss of $0.20 per share that Disney posted in the year-earlier quarter.
Moreover, Chapek cited his company's total of 179 million subscriptions across Disney+, ESPN+, and Hulu. Clearly, Disney is becoming a streaming standout in the 2020s.
Additionally, as Chapek clarified, a significant event happened in late August of 2021: Disneyland Resort launched Magic Key, a new annual membership program. If COVID-19 concerns subside in the coming year, Magic Key could provide Disney with a significant revenue source.
Wall Street’s Take
According to TipRanks’ analyst rating consensus, DIS is a Moderate Buy, based on 15 Buy and six Hold ratings. The average Disney price target is $196.21, implying 26.1% upside potential.
The Takeaway
Truthfully, 2021 wasn't such a bad year for Disney as a company. There might actually be a mismatch between the DIS stock price and the company's financial performance.
This could present an opportunity for enterprising investors.
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Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.
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