Disney shares are down almost 15% this year after falling 3.77% during the trading day to close at $123.36. The stock has potential to fall as low as $112 in the near term, but Cramer suggested it’s worth picking up at a discount.
“I don’t if you’ll see that [stock price] 20 years from now. I don’t know if you’ll see that,” the “Mad Money” host said on a CNBC Special Report show. By comparison, the stock was at $30.59 per share two decades ago. “So that’s the kind of thing that makes sense to me.”
The comments come one day after Bob Iger unexpectedly relinquished the chief executive seat at Disney and as coronavirus uncertainties continue to drag stocks on Wall Street down. Iger, who was replaced by former Disney parks chairman Bob Chapek, led the entertainment conglomerate for just over 14 years and saw the stock appreciate by 438% under his leadership, according to FactSet.
The stock is facing some pressure from the CEO transition, which shocked investors and the business world, and coronavirus-induced volatility.
As the number of COVID-19 diagnoses pick up outside of China, the major stock averages earlier this week recorded some of their worse trading days.
While health officials have been unable to stop the virus from spreading across every continent except Antarctica, and a cure for the flu-like disease has yet to be developed, Cramer said investors have to jump on the stock before solutions are found.
The old adage of buy low, sell high holds true.
“I don’t know when they’re going to solve it, and people are going to go back to Disney. And when they do, I don’t think you’ll get it for $115 or $120,” he said.
Disney, valued by the market at $222.7 billion, shares are nearly $30 off their all-time closing high in November.
“If you wait until they solve [coronavirus] — and again they will — you’ll pay more,” Cramer said.
Disney announced earlier this month that the epidemic could impact its theme parks business by $175 million this quarter, should the company’s Disneyland resorts in Shanghai and Hong Kong stay shut down for two months.
“The current closure is taking place during the quarter in which we typically see strong attendance and occupancy levels due to the timing of the Chinese New Year holiday,” Disney’s finance chief Christine McCarthy said on an earnings call. “The precise magnitude of the financial impact is highly dependent on the duration of the closures and how quickly we can resume normal operations.”
The Dow Jones Industrial Average has lost more than 2,266 points, or 8% of value, from Thursday’s close. The 30-stock index, which includes Disney, plunged more than 1,000 points in Monday’s session alone.
Disclosure: Cramer’s charitable trust owns shares of Disney.