Disney's Stock Continues To Underperform, But These Tailwinds Will Guide Shares Higher

Walt Disney Co DIS was featured as the call of the day Friday on CNBC's "Fast Money Halftime Report."

What Happened: Wells Fargo reiterated Disney with an Overweight rating and a $196 price target. The firm highlighted the 10% to 11% upside it sees in domestic parks heading into 2023.

Wells Fargo believes such could translate to roughly a 5% increase in company earnings per share. 

Sethi's Take: Douglas C. Lane & Associates' Sarat Sethi backed up the call from Wells Fargo. 

"This is a complete play on the revenge economy," he said. "People want to come out. They are traveling to Disney and the average price per ticket is 40% higher today than it was two years ago."

Sethi is also bullish on what the company is doing with its Disney+ streaming platform, which others have criticized because of the amount of spending required to take market share.

Related Link: Duped By Disney Stock? Why This Investor Is Waving Goodbye

"I love companies that spend money for the future. I think that's the way you want to go and in entertainment and services this is the company that I want to hold for three to five years," Sethi said.

The parks business combined with the streaming business creates a flywheel effect. As international travel recovers throughout the year, Disney stands to benefit, he said.

"You're buying a company that has tailwinds to its earnings growth ... so I like it," Sethi said of the analyst call.

DIS Price Action: Disney has traded between $128.38 and $191.61 over a 52-week period.

The stock was up 0.21% at $139.25 at time of publication.