Walt Disney Co DIS is trading at an attractive valuation and should be bought by investors as more states and regions are re-opening their economies, according to BofA Securities.
The Disney Analyst: Jessica Reif Ehrlich maintains a Buy rating on Disney's stock with a price target lifted from $123 to $146.
The Disney Thesis: Shares of Disney are trading at 21 times 2021 EPS and 19 times 2022 EPS, which represents a "compelling entry point" to buy a best-in-class company, Reif Ehrlich said in a Monday note. (See her track record here.)
While the global COVID-19 pandemic will continue to impact Disney's near-term outlook, the company is positioned to "grow stronger through the crisis," the analyst said.
Disney has seven catalysts to spur growth over the longer-term, she said:
1. Re-opening of its global theme parks, including Walt Disney World and Disneyland in July.
2. Resumption of feature film releases, most notably "Mulan" in late July.
3. Resumption of professional sports like the NBA (late July), which bodes well for ESPN.
4. Addition of eight new major theme park attractions and three new cruise ships over the next three years.
5. An attractive film slate over the coming years, including seven Marvel titles, four Pixar titles and the return of "Avatar."
6. Continued synergy realizations from the Twenty-First Century Fox acquisition.
7. Ongoing momentum from the direct-to-consumer business as Disney+ expands to new markets, most recently in Japan.
DIS Price Action: Shares of Disney were trading lower by 1.45% at $113.84 at the time of publication.
Photo courtesy of Disney.
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