We believe Disney is excelling in its pivot away from Pay-TV and towards Direct-to-Consumer. The launch of the Disney+ has been met with incredible fanfare and has surpassed 100 million subscriptions globally. In total, Disney projects its family of offerings could reach 300 to 350 million global subscribers by FY 2024, and we believe there is upside to management's profitability projections through faster than anticipated membership growth and better pricing. Disney is also one of our favorite "re-opening" plays and we expect the theme park business will thrive once capacity and travel restrictions ease. The popularity of the Disney+ throughout the pandemic has reenergized this iconic brand and we think Disney will come out stronger when the pandemic ends. 

We were pleasantly surprised to see Disney's domestic parks turn a profit in Q2 2021 for the very first time since the pandemic started. The pent-up demand has proven to be incredibly strong with attendance at Walt Disney World running at or near daily capacity and theme park reservations higher despite concerns around COVID. Additionally, customers are spending more money while they are there with guest spending up significantly versus fiscal 2019 levels at both Walt Disney World and Disneyland.

We also like how management has recently implemented several guest-centric services to improve the customer experience and drive yields higher. This gives us confidence in Disney's ability to operate the parks at a higher profitability level after the pandemic ends.

Target Price: We have a $100/share price target for Disney, arrived by applying a 10-year average forward P/E multiple of 18x to 2023 estimated earnings of $5.58/share.