Cramer says investors are misguided on Disney, expects theme parks and movies will bounce

Published Fri, May 14 202111:40 AM EDTUpdated Fri, May 14 20211:58 PM EDT

CNBC's Jim Cramer said Friday it's misguided for investors to focus too much on Disney 's streaming business, suggesting the tailwinds behind theme parks and movies also need to be considered. "Suddenly, all we care about with Disney — all we care about — is Disney+, and that's a very big mistake because this is a very good company," Cramer said on "Squawk on the Street." Cramer's comments came as Disney shares slid after the media and entertainment giant reported second-quarter results. While per-share earnings were higher than consensus forecasts, Disney missed expectations on revenue and paid subscribers for Disney+. The stock was down 2.3% Friday afternoon, one of just a few Dow Jones Industrial Average constituents to be in the red Friday. The 30-stock Dow was up more than 300 points. "Christine McCarthy — who by the way is the best CFO in America — made me feel that if you don't buy this stock, you're a fool ... because everything else is finally working," Cramer said. "So, does Disney+ really still determine the situation?" Following its launch i n November 2019 , Disney+ added subscribers much faster than the company projected, and Wall Street took note . Disney had hoped to garner 60 million to 90 million subscribers by 2024. The streaming service already has 103.6 million paid subscribers, Disney said its earnings report Thursday, although that was lower than the 109 million analysts were looking for, according to FactSet. Disney+ benefited from the coronavirus pandemic as people spent more time at home and watched content on the platform. However, other parts of the company's business, including theme parks, cruise ships and theatrical releases, were hurt mightily. In the second quarter, Disney's revenue from its parks, experiences and products segment were still 44% lower than a year earlier. Total quarterly revenues of $15.61 billion were 13% below the same period last year. That quarter ended March 28, 2020, meaning the most stringent pandemic restrictions in the U.S. had yet been implemented for most of it. Now, Cramer said, Disney's struggling revenue streams are ready to recover in earnest in the months ahead as more vaccinated Americans feel comfortable resuming pre-pandemic activities. "You've got other engines. You have other pistons," Cramer said. Disney shares are down more than 4% year to date. Based on Friday's price, the stock is about 14% below its 52-week high of $203.02 on March 8. Disclosure: Cramer's charitable trust owns shares of Disney.

General views of the Mickey Mouse Ferris Wheel at Disney California Adventure Park at the Disneyland Resort, which has reopened for outdoor dining and shopping on April 11, 2021 in Anaheim, California.

AaronP | Bauer-Griffin | GC Images | Getty Images

CNBC's Jim Cramer said Friday it's misguided for investors to focus too much on Disney's streaming business, suggesting the tailwinds behind theme parks and movies also need to be considered.

"Suddenly, all we care about with Disney — all we care about — is Disney+, and that's a very big mistake because this is a very good company," Cramer said on "Squawk on the Street."

Cramer's comments came as Disney shares slid after the media and entertainment giant reported second-quarter results. While per-share earnings were higher than consensus forecasts, Disney missed expectations on revenue and paid subscribers for Disney+.

The stock was down 2.3% Friday afternoon, one of just a few Dow Jones Industrial Average constituents to be in the red Friday. The 30-stock Dow was up more than 300 points.