Disney stock for long-term investors is an ‘absolute buy-in’

By:
on Jul 1, 2022
  • Nicole Webb says the Walt Disney Co is growth at a reasonable price.
  • The Wealth Enhancement Group SVP sees upside to $138 in Disney stock.
  • Shares of the entertainment conglomerate are down 40% for the year.

Walt Disney Co (NYSE: DIS) stock down roughly 40% from its year-to-date high is an “absolute” buy, says Nicole Webb. She’s the SVP and Financial Advisor at Wealth Enhancement Group.

Disney is growth at a reasonable price

Webb dubs the entertainment conglomerate a textbook definition of “growth at a reasonable price”. She’s bullish on both its media and parks businesses. This evening on CNBC’s “Closing Bell: Overtime”, Webb said:

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[Walt Disney] is a brand powerhouse. It has the best, evergreen intellectual property in media and it has been able to attract people to its parks with penetration pricing that outpaces inflation over the decades.

In May, the American multinational reported weaker-than-expected results for its fiscal Q2. Subscriber growth at Disney+ (streaming service), however, topped estimates.

Disney stock should trade at around $138

Webb sees upside to around $138 a share in Disney that translates to a more than 45% upside from here. At 18 times earnings, she reiterated, the stock is quite inexpensive, particularly for the long-term investors.

Anywhere in the neighborhood of a discount of 30% off of that high that we saw last year would be a reasonable price for me. As a point of entry right now, it just feels like a long-term investors’ absolute buy-in.

Disneyland in Shanghai reopened on Thursday after two months of COVID-related shutdown, which as per Jim Cramer, is a reason to buy Disney stock. Wall Street currently rates it at “overweight” as well.

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