The return of Bob Iger to the Disney throne was highly anticipated, and for the most part, well-received. DIS is up more than 22% in the past year and recent earnings reports have suggested that Iger is steering the ship in the right direction. The stock is up more than 33% through 2024.

However, one activist investor group has not been satisfied thus far. Trian Fund Management is using its leverage as a large shareholder to try and win two board seats in a proxy vote today. The fund holds roughly 32.3 million shares, which represents about 1.8% of the company’s market capitalization.

Trian CEO Nelson Peltz feels that the company has acted “stupidly”, taking its many advantages for granted and contributing to its own downfall. Financial performance has tanked and the stock has followed suit, neglecting shareholders along the way.

All of this comes after Disney just beat out the earnings expectations in the first quarter of 2024, delivering adjusted earnings per share of $1.22 compared to the $0.89 analysts were forecasting. 

The company also increased its dividend by 50% while rolling out an extensive cost-cutting plan aimed at trimming $7.5 billion in fiscal spending this year alone. Most importantly, Disney’s outlook for the full year of $4.60 is upbeat – suggesting Iger’s plan is right on track.

Other big moves for Disney include a $1.5 billion investment in Epic Games, a partnership with ESPN to stream sports next year, streaming an exclusive version of Taylor Swift’s Eras Tour movie, and a Moana sequel.

The consensus is that Trian will fall short, with more than half of all voting shares leaning in favor of Disney’s existing management. That being said, we’ll know the verdict shortly. 

In the meantime, what does all this mean for those currently invested in DIS or considering trading the stock? We took a peek at the VectorVest stocks software and found 3 things you need to see.

DIS Has Fair Upside Potential and Safety With Very Good Timing

VectorVest has outperformed the S&P 500 index by 10x over the past 20 years and counting through a proprietary stock-rating system. The best part is that it simplifies your trading strategy by giving you all the insights you need in 3 ratings: relative value (RV), relative safety (RS), and relative timing (RT).

Each rating sits on its own scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy. You’re even offered a clear buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. Here’s what we found for DIS:

  • Fair Upside Potential: The RV rating draws a comparison between a stock’s long-term price appreciation potential (based on a 3-year price forecast), AAA corporate bond rates, and risk. This offers much better insight than the typical comparison of price to value. DIS has a fair RV rating of 0.85, albeit a ways below the average.
  • Fair Safety: The RS rating is a risk indicator computed from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 0.90 is also fair for DIS.
  • Very Good Timing: The RT rating assesses the direction, dynamics, and magnitude of a stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year. DIS has a very good RT rating of 1.39, reflecting its strong performance on the stock market through 2024 thus far.

The overall VST rating of 1.11 is good for DIS and enough to earn the stock a BUY recommendation. But before you make your next move, take a moment to assess this opportunity yourself with a free stock analysis at VectorVest!

Want These Types of Insights at Your Fingertips so You Can Win More Trades?

Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. DIS is in the midst of a proxy vote today as one activist investor has been underwhelmed by Bob Iger’s performance since regaining control of the company. That being said, the Iger plan appears to be proving effective thus far. The stock itself has fair upside potential and safety with very good timing.

Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action!

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