Investment guru William Priest predicts Walt Disney Co. stock will be an attractive bet for the next decade.
“If you want to put the stock away for 10 years, it should be outstanding,” the CEO of Epoch Investment Partners told Barron’s.
Walt Disney (DIS) stock opened Tuesday at about $144.
The entertainment giant “is becoming what is know as a PaaS: platform-as-a-service company. It’s a reinvention of a very successful business model. Ultimately, all of Disney—the theme parks, the merchandise—will be bundled,” Priest explained to Barron’s.
“It’s going to enable Disney to reduce reliance on third parties, creating value by bringing all content in-house, versus licensing independent content categories. And it should improve capital allocation,” he said.
“Earnings this year should exceed $6. A $200 stock price is not unrealistic if they successfully transition to a model with better margins and higher capital returns,” he said.
Priest also offered his four other favorite stock picks:
- Bausch Health (BHC): “The combination of deleveraging and the transfer of the debt value to the equity value should result in a 50% move in the stock price,” he said.
- Takeda Phamaceutical (TAK): The stock has been good, up 22% in 2019. We still think it’s undervalued.
- Centene (CNC): The stock is $61. It could be up 25% this year. We think they can sustain a high-single digit organic growth rate, driven by market-share gains and conversion of Medicaid programs to private insurance at the state level.
- Woodward (WWD): It’s just under an $8 billion market cap. It’s a high-quality supplier of aerospace and industrial products, and sells for around $120 a share. The enterprise value is about $9 billion, with 65 million shares outstanding.
Meanwhile, Walt Disney said on Tuesday it had moved up the launch of its video streaming service, Disney+, to March 24 in the United Kingdom and in regions across Western Europe by a week, ahead of its earlier launch schedule of March 31.
Disney+ would be available in UK and Ireland for 5.99 pounds ($7.81) per month or 59.99 pounds every year, and in France, Germany, Italy, Spain, Switzerland and Austria for 6.99 euros ($7.76) per month or 69.99 euros annually, Reuters said.
The streaming service is among the top players in the crowded streaming landscape, competing with Netflix Inc , Apple Inc's Apple TV+, and Amazon.com Inc's Prime Video in the region.
Disney+ was downloaded nearly 41 million times on mobile devices since its launch in November, according to a report by research firm Sensor Tower last week.
Netflix, which is scheduled to report its fourth-quarter earnings after markets close on Tuesday, had more than 60 million paid subscribers at the end of September 2019.
Disney+ is set to launch in Belgium, Portugal and the Nordic regions later in summer this year, the company said.
Separately, Disney said on Friday its Chief Executive Officer Bob Iger's total compensation in 2019 was $47.52 million, down from $65.65 million in 2018.
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