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Buy 3 Wide Moat Stocks With Double-Digit Near-Term Upside Potential
DISDisney(DIS) ZACKS·2025-05-20 14:01

Core Insights - The wide moat strategy focuses on investing in companies with durable competitive advantages that ensure long-term profitability and market leadership [1][2] Group 1: Pfizer Inc. (PFE) - Pfizer is a leading drugmaker in oncology, bolstered by the acquisition of Seagen, which generated 3.4billioninsalesfor2024,reflectinga383.4 billion in sales for 2024, reflecting a 38% increase on a pro forma basis [6] - The company has committed resources to develop treatments in oncology, internal medicine, immunology, inflammation, and vaccines, with new gene therapies for hemophilia gaining approval in 2024 [7] - Pfizer anticipates cost cuts and restructuring to save 7.7 billion by the end of 2027, alongside growth in non-COVID sales driving profit growth [8] - Expected revenue and earnings growth rates for Pfizer are 0.6% and 1% respectively for the current year, with a 3.4% improvement in the Zacks Consensus Estimate for earnings over the last 30 days [9] - Pfizer's forward P/E is 7.41X, significantly lower than the industry average of 12.96X and the S&P 500's 19.20X [10] - The average price target for Pfizer indicates a potential increase of 23.7% from the last closing price of 23,withamaximumupsideof43.523, with a maximum upside of 43.5% [11] Group 2: The Coca-Cola Co. (KO) - Coca-Cola has shown positive business trends, consistently beating expectations, supported by higher pricing strategies amid inflation [12] - The company's all-weather strategy aims for revenue growth in 2025, focusing on marketing, innovation, and revenue management [12] - Expected revenue and earnings growth rates for Coca-Cola are 2.4% and 2.8% respectively for the current year, with a stable Zacks Consensus Estimate for earnings [13] - The average price target for Coca-Cola suggests an increase of 11.1% from the last closing price of 71.93, indicating a maximum upside of 19.6% [14] Group 3: The Walt Disney Co. (DIS) - Disney reported steady fiscal 2025 results with year-over-year growth in revenues and earnings, although international park locations faced declines [15] - The company expects double-digit percentage growth in segment operating income for fiscal 2025, with ESPN achieving significant viewership growth [16] - Disney has transformed its streaming business into a profitable growth engine, reporting its first-ever Direct-to-Consumer operating profit in FY2024 [17] - Expected revenue and earnings growth rates for Disney are 3.8% and 15.1% respectively for the current year, with a 4.6% improvement in the Zacks Consensus Estimate for earnings [18] - The average price target for Disney indicates a potential increase of 10.9% from the last closing price of $112.66, with a maximum upside of 31.4% [19]