Given the rapid stock price appreciation investors have seen with Walt Disney Company (NYSE:DIS) stock of late, it may be hard to believe that some investors may find value in such stocks today. Earnings have been depressed, and actually have turned negative in recent quarters as the pandemic has deeply depressed the company’s earning ability in key businesses such as theme parks, cruises, and hospitality.
That said, there is significant optimism surrounding the ongoing vaccination efforts put forward in the U.S., Canada, the U.K., and around the world. With pandemic-related restrictions likely to be lifted or at least softened in the coming months, expectations are that earnings should get back on track some time later next year.
Most investors are now looking through the next 12-24 months, toward 2022 and beyond. This has resulted in stock price normalization to, in many cases, levels that are higher than the highs we saw in pre-pandemic times. Disney is certainly a case in which an investor has to push through and look forward to the future to be able to hold this growth play.
With online streaming now making headlines for Disney with the company’s Disney+ streaming service taking off, investors are now valuing Disney more like a Netflix Inc. (NASDAQ:NFLX) rather than a more traditional media company.
Concerns around ESPN and the company’s media assets have been overshadowed by the company’s streaming growth and future parks & entertainment segments. As I’ve stated before, this is a great long-term value pick for those with long-term investing time horizons, so hold on tight and never sell!
Invest wisely, my friends.
