Disney (DIS) is still undervalued, according to many shareholders and experts.
Shares of the media giant are up 1.7% to $117.98 post-market after a beat on top and bottom line earnings and positive comments surrounding the company's recent acquisition of key Twenty-First Century Fox (FOXA) assets and Disney's streaming push.
Still, given the pivot to the lucrative streaming market and the steady hand of CEO Bob Iger, the stock might still be undervalued.
"We think it's a business that's worth around $150 per share," Trip Miller, founder and managing partner of Gullane Capital told Real Money. "We, as value investors, have always trusted Bob Iger."
Miller's firm holds an undisclosed long position in Disney that he said they will hold for the foreseeable future.
An area where Iger is looking to quickly capitalize and create value for shareholders like Miller is in direct to consumer services.
Disney Plus Push
Helping the company climb higher to the stated price target of analysts like BTIG's Rich Greenfield and investors like Miller is the company's much discussed direct to consumer "Disneyflix" effort, which will now be called Disney Plus.
"We're going to be nimble, as I think we've already evidenced by just the fact that we're going into the direct-to-consumer space as aggressively as we're going into it," Iger told analysts during the earnings presentation on Thursday. "We're looking at the marketplace, we're seeing disruption, and we're reacting to it hopefully on a timely basis so we can take advantage of the trends that we're all seeing today in television."
Iger noted that the progress of ESPN Plus, the company's existing DTC program for sports is positive and reflects the company's ability to excel in the space.
"The early growth trajectory of ESPN Plus is very encouraging and we believe it bodes very well for our overall global DTC strategy," he said. "Our Disney-branded service which we're officially calling Disney Plus will be in the U.S. market late next year."
He noted that the company might expand its investment in Hulu as well, which it picked up a 60% stake from its $73 billion Fox acquisition.
"[The DTC push] is a perfect way to pivot from being too dependent on ESPN and traditional television," Miller explained to Real Money. "We are always wary of 'synergies,' but we see a lot of synergies in the Fox deal."
Miller noted that Disney is not recession-proof, but reiterated his confidence in the company.
"They buy back stock, they pay a dividend, and they have a great management team," he said. "Regardless of what the economy does, this company will find a way to make money."