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Mario Gabelli: Disney Stock Could Surge to $200 in 2 Years

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Monday, 12 November 2018 09:07 AM

Investment guru Mario Gabelli predicts that Walt Disney stock could soar nearly 70 percent in the next two years.

The longtime investor is a Disney shareholder and explained that the company has a combination of strong earnings growth, minor capital expenditures, and an attractive multiple that will push the stock higher, CNBC explained.

Disney's stock price has increased slightly over the course of 2018, primarily due to investor focus on the Burbank, California-based company's new online streaming media service and the acquisition of assets from Fox, CNBC explained.

Disney’s stock (DIS) closed at $118 on Friday. The shares have hit a low of $97.68 and a high of $120.20 this year. A jump of $82 to $200 would represent a gain of just about 70 percent from Friday's closing price.

Dow-member Disney's shares rose 2.8 percent Friday after the media company reported better-than-expected results as its theme parks and Marvel movie “Ant-Man and the Wasp” attracted crowd, Reuters reported.

Disney and other media companies are facing a shifting landscape as more TV watchers switch to streaming rather than traditional cable bundles.

But Disney’s diversified entertainment portfolio, which runs from films and cable channels to theme parks, helped buoy its results. Studio entertainment revenue, which includes theater box office and streaming, jumped 50 percent to $2.15 billion on the strength of films such as “Avengers: Infinity War,” the Associated Press explained.

Disney also is building its streaming service offerings. It launched $5-a-month ESPN Plus streaming service with sports in April. And a Disney-branded streaming service is expected to launch later next year.

In a call with analysts Thursday CEO Bob Iger gave a few new details about the new streaming service, which will be called Disney Plus. No pricing has been disclosed.

The company plans to keep investing in Hulu and use it as a home for more general programming. Family-friendly shows and movies will head to Disney Plus.

The streaming service will feature five categories of material: Disney, Pixar, Marvel, Star Wars and National Geographic. Original programming will include “The Mandalorian,” the first live action Star Wars series, created by Jon Favreau; a rebooted “High School Musical” series and a new documentary series focused on Disney.

With the pending Fox deal, Disney now also takes a controlling stake in streaming service Hulu, which is jointly owned by Disney, Fox, Comcast and AT&T.

The Fox acquisition is expected to close at the beginning of next year. With it, Disney gets Fox TV and film studios, Marvel’s X-Men and Deadpool, along with programs shown on such Fox channels as FX Networks and National Geographic. Fox’s productions also include “The Americans,” ″This Is Us” and “Modern Family.”

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Investment guru Mario Gabelli predicts that Walt Disney stock could soar nearly 70 percent in the next two years.
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Monday, 12 November 2018 09:07 AM
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