Walt Disney (NYSE:DIS) won’t double in stock price, but it has the potential for over 50% upside according to some predictions and around 25% upside based on consensus views. Despite its price tag being half its 2021 levels, a rebound is possible with an economic recovery for DIS stock.
Additionally, Disney raised its theme park prices to counter streaming competition and the impact of a writer’s strike. The company is expected to report improved EPS figures on November 8, which could benefit DIS shares.
Let’s discuss why buying Disney stock now could be a wise decision and how the company’s prospects are looking.
Disney on Giving Out Dividends Again
After nearly four years without cash dividends, Disney confirmed their return. In February, Disney unveiled plans to reinstate dividends by the end of 2023, which Iger confirmed two months ago. Disney will likely announce its initial dividend alongside its upcoming fiscal fourth-quarter earnings report next month.
While the dividend won’t be substantial, Disney has never been a high-yield stock. With ongoing cost-cutting efforts and external pressures, it’s not the right time for generous payouts. Nevertheless, even a modest dividend can rekindle interest from income-focused funds and investors, proving that small declarations can yield significant results.
Q4 Results on November 8
Disney’s fiscal year concluded in September, with its fiscal fourth-quarter results set for release after market close on November 8. Analysts anticipate Q4 revenue to match the previous year at $20.13 billion.
However, earnings are expected to double to $0.68 per share. Disney’s financial update reveals mixed trends, with flat year-over-year revenue due to various factors. Yet, a substantial surge in profitability is evident, attributed to Disney’s cost-cutting strategy aimed at reducing annual operating expenses by over $5.5 billion.
Another event to anticipate on November 8 is the potential return of Disney’s dividend. In February, Disney disclosed its plans to reinstate semiannual dividend payments before the close of the 2023 calendar year, a commitment it reaffirmed six months later. It would be logical for Disney to make this announcement alongside its fiscal-year financial release.
Buy DIS Stock While You Can
Disney retains several appealing aspects, such as its profitable parks and intellectual property spanning Disney classics, Marvel, and Star Wars. A revival may require several quarters, given the streaming profitability goal and portfolio restructuring timeline.
However, improved finances or a significant asset sale might spur investor interest, making it an opportune time to invest in Disney’s low-priced entertainment stock.
On the date of publication, Chris MacDonald has a LONG position in DIS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
