Jim Cramer is advocating for The Walt Disney Co. (NYSE:DIS) stock, suggesting the entertainment giant’s recent dip has created an attractive entry point for investors despite strong fundamentals.
What Happened: “Disney reported an excellent quarter a couple weeks ago, but didn’t get any credit for it,” CNBC’s Cramer said on Tuesday, noting that management’s conservative approach to full-year guidance contributed to the stock’s recent weakness.
“The dip here has created a terrific buying opportunity for you, with the stock now trading at bargain levels relative to the kind of valuation it used to get,” Cramer said.
The entertainment giant’s latest earnings report exceeded both revenue and profit expectations, though concerns emerged over Disney+ subscriber losses and unchanged guidance. CFO Hugh Johnston cited a “rapidly evolving macro environment” in defending the company’s cautious outlook.
Cramer, whose CNBC Investing Club’s Charitable Trust has held Disney since 2018, pointed to several encouraging developments. The company’s direct-to-consumer segment achieved profitability, boosted by Hulu’s performance. Additionally, Disney’s parks and cruise division demonstrated resilience despite weather-related challenges, while its sports segment outperformed expectations ahead of a new ESPN platform launch.
Why It Matters: The bullish stance comes as Disney’s film division maintains momentum, with “Captain America: Brave New World” generating $192.4 million globally in its opening weekend. This performance suggests continued strength in Disney’s content pipeline, though the film’s mixed critical reception (50% on Rotten Tomatoes) raises questions about long-term box office potential.
“After looking into the reasons why people sold Disney after the quarter, I’ve got to tell you. I think the bear case: thin,” Cramer concluded, reinforcing his optimistic outlook on the stock’s prospects.
Recent analyst coverage remains largely positive, with Rosenblatt, Morgan Stanley, and Needham assigning an average price target of $131.67 in February, implying nearly 20% upside potential.
Price Action: Disney stock closed on Tuesday at $109.56, well below the consensus analyst price target of $123.32. The stock has seen an all-time high of $197.16 in March 2021, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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