Disney (DIS 1.05%) and Nike (NKE -0.27%) both disappointed the bulls in 2022. The House of Mouse lost 44% of its value as investors fretted over its streaming media losses and inflationary headwinds. Nike's stock dropped 30% as investors worried about its rising inventories and shrinking margins. But could either of these iconic companies bounce back this year?
Analysts expect Disney's revenue and adjusted EPS to increase 8% and 17%, respectively, in fiscal 2023. Inflation might curb consumer spending on theme park tickets and movies, but its streaming losses could gradually narrow as economies of scale kick in. Disney's stock looks reasonably valued relative to those growth rates at 23 times forward earnings.
Nike's gross margins should eventually stabilize again, but its stock still looks a bit too expensive at 39 times forward earnings. Its rival Adidas, which faces much tougher near-term headwinds, trades at 30 times forward earnings.
Disney and Nike will both face a lot of challenges in 2023. I wouldn't rush to buy either stock right now, but I believe Disney is the better turnaround play because it's more deeply diversified, it's growing faster, and it's cheaper. Nike is still a solid investment, but its stock simply looks too expensive relative to its near-term growth and its industry peers.
The Walt Disney Company (DIS 1.07%) is rising quickly in the streaming industry after Netflix (NFLX 1.83%) had a several years head start. This video will determine which stock is the better one to buy.
After a challenging 2022, when countless companies suffered steep stock declines, 2023 has seen Wall Street rally over industries that fell out of favor last year. For instance, the entertainment and tech industries have attracted bullish investors, with market leaders Apple (AAPL 0.85%) and Disney (DIS 1.05%) seeing their stocks rise about 17% and 14%, respectively, since Jan. 1. That's after Apple's stock fell roughly 27% and Disney's 44% in 2022.
These companies are leaders in their respective industries while also in direct competition in streaming. As Apple and Disney's stocks show signs of recovery, now is an excellent time to consider investing. So which is the better buy? Let's take a look.
Last year, the Nasdaq-100 Technology Sector index fell 40%, while Apple's more moderate decline of 27% meant it outperformed peers like Alphabet and Amazon, which saw their stocks plunge by 38% and 49% respectively. As a result, the iPhone company proved its resilience last year, with macroeconomic strains hitting its competitors harder.
An innovative technology stock, Apple climbed about 247% in the last five years and 832% in the last decade. Meanwhile, revenue increased by 48% to $394.33 billion since 2018, and operating income soared 68% to $119.44 billion. The company's consistent growth has gained it a reputation for reliability, which safeguards its stock in the case of dismal quarterly results.
For example, in the first quarter of 2023, Apple reported its first quarterly revenue decline since 2019, with revenue falling 5.5% year over year to $117.15 billion and missing analysts' forecasts by $4.5 billion. While a quarterly miss will often send a company's stock tumbling, Apple shares rose 6% in the week after its earnings release.The company's consistent growth over the long term makes temporary headwinds inconsequential to many of its investors.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
This chart is not advice or a guarantee of success. Rather, it gauges the real-time recommendations of three popular technical indicators: moving averages, oscillators and pivots. Finder is not responsible for how your stock performs.
Valuing Walt Disney Company stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Walt Disney Company's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
Turning to Wall Street, Disney has a Strong Buy consensus based on 20 Buys and four Holds assigned in the past three months. At $119.15, the average Disney stock price forecast suggests 20.26% upside potential.
Indeed, a crisis may be a stretch for some, but for the Disney shareholders who bought at or around the peak, Disney has been an investment nightmare as shares fell by more than 55% from peak to trough. The company has had enough time to move on from the worst of the pandemic, and its messy succession planning has also been difficult to ignore, with Iger coming out of retirement to stop the sinking ship of a stock.
Turning to Wall Street, DIS stock comes in as a Strong Buy. Out of 24 analyst ratings, there are 20 Buys and four Hold recommendations. The average Disney price target is $119.75, implying upside potential of 9.5%. Analyst price targets range from a low of $94.00 per share to a high of $177.00 per share.
All eyes are on November's upcoming payrolls report, due out Dec. 2. Further, the Federal Reserve's Dec. 13-14 meeting looms ahead, and investors await the central bank's next steps on its monetary policy campaign. There is still plenty of time for stocks to churn before the year ends.
This means investors need to shift their focus toward longer-term prospects instead of fixating on near-term gyrations in the market. See below for five stocks picked by Wall Street's top pros, according to TipRanks, a platform that ranks analysts based on their previous performance.
However, after the company posted its quarterly results, Susquehanna analyst Christopher Rolland noticed that Nvidia is "getting back on track." This prompted him to reiterate a buy rating on the stock and raise the price target to $185 from $180. (See Nvidia Dividend Date & History on TipRanks)
Another of Rolland's stock picks is semiconductor company Marvell Technology (MRVL), which is slated to post its third-quarter fiscal 2023 results on Dec. 1. Ahead of the print, the analyst identified several dampening factors that are expected to be a near-term sore point. Keeping that in mind, Rolland trimmed the price target to $75 from $90.
Earlier this month, project management tool provider Monday.com (MNDY) delivered banner quarterly results, which buoyed the confidence of investors and analysts alike. Among the Monday.com bulls was Tigress Financial Partners analyst Ivan Feinseth, who reiterated a buy rating on the stock.
Entertainment company Disney (DIS) is another stock on Feinseth's buy list. The analyst recently reiterated a buy rating and $177 price target on the stock, mainly encouraged by the return of former CEO Bob Iger, who is expected to drive "a return to creativity dominance."
Furthermore, after a volatile 2022, Disney and Netflix are two stocks that many believe could have substantial rebounds this year as inflationary concerns start to subside. To that note, Disney and Netflix stock sill trade 36% and 26% from their 52-week highs respectively.
In this regard, both stocks trade attractively relative to their past from a price-to-earnings perspective. Netflix especially stands out trading at $294 and 26.1X forward earnings which is well below its decade high of 513.4X and a 75% discount to the median of 107.3X.
There may still be better buying opportunities ahead for Disney and Netflix stock but holding on to shares at their current levels could be rewarding as they appear to be resuming growth following a rough 2022 for most companies.
There are loads of different Walt Disney World tickets and passes, and it can be very confusing to figure out which ones to buy and how to get the best discounts and deals on them. This page can help.
Tickets can look perfectly new and real, yet be worthless. For example, they may be selling real Disney ticket stock that were shoplifted, but since the tickets were never paid for, they have not been validated and they have zero value.
For now, though, the market is correctly implying earnings weakness through the course of this year, he says. Over the next five to 10 years, however, Hansen believes it's realistic for Disney's stock to climb back.
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