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We’re buying 50 shares of Disney at about $98 per share. After Monday’s trading, Jim Cramer’s Charitable Trust will own 880 shares of DIS, increasing its weight in the portfolio to 2.63% from 2.49%. With Disney shares back below $100 each, we’re stepping back to take advantage of what we see as an attractive risk/reward. Technically, the stock is trading near its 200-day moving average. More importantly, it’s now valued at about 18 times fiscal 2025 earnings, an estimate that investors will begin to focus on in the coming months. Disney is scheduled to report Q3 fiscal 2024 earnings next month. That’s as cheap as we’ve seen this stock since the fourth quarter of 2023. DIS YTD Mountain Disney Since the beginning of the year, trading at its long-term moving average and trading at a cheap valuation doesn’t automatically mean it’s a buy. But in Disney’s case, it’s not, because we don’t think the setup reflects the fundamentals correctly. We see several reasons for the upside — and with Monday’s addition, we’re upgrading the stock to our buy-equivalent rating of 1. For starters, the box office can only get better from here. “Inside Out 2” was well-received and became the first film since “Barbie” to reach $1 billion in global ticket sales. Disney has several popular franchise releases in the works for this year, including “Moana 2,” “Mufasa,” and “Deadpool & Wolverine” from the “Lion King” series. There’s more to come in the long term. As for experiences, analysts expect growth to pick up after the current quarter as companies tighten their belts. Demand for theme parks remains resilient despite mounting inflationary pressures, and the sector will be further supported by the launch of a new cruise ship later this year and two additional ships in 2025. While direct-to-consumer streaming losses are expected to continue in the third quarter, management reiterated in its Q4 post-earnings call in May its intention to bring the DTC unit to sustainable profitability this fiscal year. In our view, the combination of technical support — and, more importantly, an attractive valuation — coupled with what appears to be a strong backdrop for all key operating segments as we enter fiscal 2025 presents us with a strong opportunity to buy back some shares. We sold them back in early April at just over $120 apiece. (Jim Cramer’s Charitable Trust is long DIS. See here for a full list of stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charitable fund portfolio. If Jim talks about a stock on CNBC, he waits 72 hours after a trade alert is sent before executing the trade. The above Investment Club information is subject to our Terms and Conditions and Privacy Policy, as well as our Disclaimer. No fiduciary obligation or duty is created or imposed by your receipt of any information provided in connection with the Investment Club. No specific results or profits are guaranteed.
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