NTR has experienced a recent decline in revenue growth after almost two years of tailwinds of exploding sales growth due to high inflation. On July 11, the company announced production curtailments, as a result, EBITDA would likely fall below the bottom end of its previous guidance (previous guidance on 2023’s EBITDA was in the range of $6.5B to $8B). NTR is trading at 9.6x Forward P/E, NTR also has a strong balance sheet, solid cash flow, and aggressive share repurchases, we think NTR is looking attractive at this valuation and could do well three, five years from now.
DIS also looks attractive, trading at 20.5x Forward P/E. DIS’s theme park business is expected to recover favourably in terms of both revenue and profitability after COVID. However, DIS’s key value creation going forward is its streaming segment, which is still unprofitable, and growth is recent slow due to the intense competition in the streaming landscape. However, given the risk/rewards profile, we think DIS is attractive for a potential upside.
Overall, we think both names are attractive with decent potential upside, we would be comfortable holding both at these valuations.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in DIS.