NEW YORK (CNN/Money) - It's not hard to find people who want to diss Disney. And it's not hard to figure out why: The company is a shambles, as one writer for this Web site explained in detail just a few days ago (see Paul R. La Monica's "Where's Disney's magic?")

Yet within the past two weeks, three major brokerage firms have upgraded the stock to a Buy, and Disney's recent earnings report was surprisingly strong.

At this point, in fact, Disney looks like a classic example of a long-term value investment. The stock is fairly valued on current earnings, but most of the company's business lines could turn in much higher earnings in more favorable economic circumstances.

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It may be impossible to know exactly what will be the catalyst that unlocks Disney's value. But management is under pressure to get the stock up -- and Disney could once again become the target of a hostile takeover bid.

Let's consider these issues point by point:

First of all, the outlook for the media sector is very positive long term, as I discussed in the May issue of MONEY Magazine (see "Making money in media"). The industry is undergoing a massive consolidation, underscored by General Electric's recent merger of its NBC division with Vivendi Universal Entertainment.

Eventually, the media sector likely will be dominated by just a handful of companies, including News Corp., Viacom and Time Warner (owner of this Web site), as well as Disney and GE. Such concentration typically leads to higher profitability for the industry, by limiting competition.

Several of Disney's businesses, most notably theme parks, are economically sensitive. Theme park revenue and profit margins will improve if the economy continues to grow at an above-average rate, especially if international tourist traffic picks up.

It's true that Disney's latest round of movies has bombed -- remember "The Alamo." But it was only a year ago that the company could point to "Pirates of the Caribbean" and "Finding Nemo" as proof of a golden touch.

Fact is, nobody in the movie business is right all the time -- and conversely, no string of flops continues forever. In addition, DVD sales of older hits have tended to shore up profits during recent cold streaks.

The ABC network hasn't been performing well lately either, but it's nothing that a couple of hit shows won't fix.

And cable, led by ESPN, helps to buffer earnings during the bad stretches.

The only question that remains is whether the stock's valuation is compelling. In other words, is the stock a bargain?

It certainly looks like a good bet to me. At $23.30, the stock trades at less than 24 times depressed 2004 earnings. Assuming Disney turns around some of its businesses within the next five years, earnings could climb at nearly a 15 percent compound annual rate. That makes today's P/E multiple look quite reasonable.

Analysts figure that Disney's breakup value is over $30 a share, so the stock currently is trading for less than it's worth, as Comcast CEO Brian Roberts confirmed in February with his bid -- at the time, Disney stock was trading slightly higher than it is today.

Most special situations analysts figured that the stock would go for more than $30 a share. But Roberts is known for his patience and hesitancy to overpay. And after protracted resistance from Disney, he dropped his bid in April.

Nonetheless, if Roberts was willing to acquire Disney at around $24, you can bet that it's a good value at that price. And now that the stock is back down to that level, many think that Roberts may try again -- or that if he doesn't, another media giant will.

More to the point, Disney CEO Michael Eisner was nearly toppled as a result of Comcast's bid. In March, Eisner lost his job as chairman, although he remains CEO. And he knows that if he can't get the stock above $30 a share, somebody else probably will get the chance to try.

Michael Sivy is an editor-at-large for MONEY magazine. Beginning May 17, the Sivy on Stocks column and newsletter will be available only to MONEY subscribers and AOL members. Don't miss out: Continue getting analysis and stock picks twice a week. Plus: Subscribe now and you will also receive access to the Sivy 70 -- our exclusive list of America's Best Stocks -- and coming in June, to Sivy's Guide to Growth. Click here to subscribe to MONEY and to sign-up for the Sivy newletter.