Antradienis, 23 balandžio, 2024
US Stocks

The Walt Disney Company Stock Analysis

The Walt Disney Company Shares. The Walt Disney Company, together with its subsidiary companies, is a leading diversified international family entertainment and media enterprise, consisting of the following business segments after restructuring: Disney Media and Entertainment Distribution and Disney Parks, Experiences, and Products. It is a global-level company.

The following brands belong to the company:

The Walt Disney Company Stock Analysis
  • Disney Channels,
  • ABC,
  • National Geografic,
  • FX,
  • Disneyland,
  • Walt Disney World,
  • Adventures,
  • The Walt Disney Studios,
  • Pixar,
  • Blue Sky,
  • 20th Century Studios
  • ir kiti.

In Hong Kong, the company owns 48% of the shares of Hong Kong Disneyland Resort, while in Shanghai, it owns 43% of the shares of Shanghai Disney Resort. The company receives royalties from Tokyo Disneyland Resort for intellectual property. The entertainment studio produces live-action and animated films, which are distributed through well-known companies such as Walt Disney Pictures, Pixar, Marvel, Lucasfilm, Touchstone, and UTV.

The Walt Disney Company sells consumer goods through The Disney Store, DisneyStore.com, and MarvelStore.com. It publishes educational books and comics. It develops computer games and applications for computers and smartphones. The Walt Disney Company is one of the most well-known companies in the world, and it has the most recognizable logo. Just for that reason alone, this company is attractive to a savvy investor.

In the beginning of 2019, the company acquired Twenty-First Century Fox, Inc. (TFCF).

Income by sectors:

Income by sectors
Income by sectors

Finances

The company is still struggling to recover from the consequences of the pandemic, restructuring, and other efficiency improvement processes. But things are moving, not necessarily in the right direction. The pace of Revenue growth remains stable, and for several years now, the average annual Revenue growth has been above 7%.

It still does not guarantee the company positive average annual profit growth. Both the 10-year and 5-year average annual EPS growth rates are negative, -9% and -31% respectively. Net margin was only 3.80%, and the Gross margin decreased to 33.40%

The company continues to successfully increase its Equity, while Liabilities decrease. And now, Total liabilities constitute less Equity, 98% – the first time in five years. It will still take 21 years to cover Long-term debts with Net profit in 2023. This is a very bad indicator, but its dynamics are important to us. Although we see that for the second consecutive year, the indicator is not improving.

For fully understandable reasons, the company has not paid Dividends for three consecutive years and has not repurchased its own shares. However, the Return on Equity (ROE) dropped to -9.43%. Its 10-year average annual decrease was -0.35%. The 10-year average Return on average Equity (ROAE) decreased to 13.15%. We consider this a good return. $1 invested in LTA earns almost $1.68 EPS.

The F_SCORE indicator is 6. It’s an investment evaluation. The company still has the potential to attract the attention of Intelligent investors. A slight recovery is observed in Cash flows. They have been positive, and there have been upward trends since 2020 after negative indicators. Over the past 10 years, the average annual growth of the stock’s Book value was 7.90%.

If the company’s shareholders wanted to sell shares and invest today in a 10-year US T-Bonds and get the same return as the company provided in 2023, they should sell the shares for just $29 each (the market price at the time of writing was $120). We can see that the profitability of the company does not surpass the profitability of fixed income instruments.

The evaluation of investment analysis is one of the worst assessments we have made:

Investment Scoreboard
Investment Scoreboard

The Walt Disney Company stocks

The company’s stocks are listed on the NYSE. The ticker is DIS. The company has the potential to increase value for shareholders. Therefore, we hope that market participants will see and appreciate that.

In recent years, the stock market has experienced significant fluctuations, so the standard deviation of prices is as high as 27%, and with a beta of 1.39, we have a risky stock. The PEG is negative at -0.63, and the Equity Risk Premium is almost 2%, which is not bad at all. The 10-year historical stock price CAGR is only 0.59%.

The perspective of the prices calculated by the GRAPES method reaches an incredible $218. This differs significantly from the evaluation fixed interest perspective, although it also relies on the same interest rates, but expects a rapid EPS growth rate in the future.

Our method calculated price perspective looks similar. The pessimistic scenario ‘suggests’ an average annual stock price decline of one and a half percent. The highly optimistic scenario is indeed very optimistic. According to it, the stock price could rise by up to 30% annually in the future:

The DIS Price Perspective
The Price Perspective

Since the idea was announced in the beginning of 2016, investors received only 28% or 3.10% average annual pre-tax return.

Assessments and forecasts of third parties

Artificial Intelligence:

The Walt Disney Company (DIS) is a large international company, known for its various lines of business, including film, television, theme parks, and other entertainment segments. Market capitalization: 224.44 billion USD. Earnings per share (EPS) over the last 12 months: 1.63 USD. Average annual earnings forecast: 4.33 USD. Average annual revenue forecast: 84.91 billion USD. Analyst consensus rating: Moderately Buy with a projected price target of 122.13 USD.

Average 12-month price forecast: 117.05 USD (decrease of 4.70% from the price at the time of writing). Long-term forecast for 2025: 108.00 USD (decrease of 12.06% from the price at the time of writing).

TradingView consensus:

The TradingView consensus
The TradingView consensus

Stock Analysis consensus:

Stock Analysis consensus
The Stock Analysis consensus

Price chart

Conclusions

As we can see, most analysts tend to believe that the stock price may sharply decline in the future. And it will fall if the company’s performance does not meet market expectations. And if they are high. Very high. Therefore, it is better to refrain from buying shares of this company at the moment. Or sell the ones you already have? We’re not rushing into doing that yet…

„The Walt Disney Company is a valuable enterprise with a wide range of operations and a strong financial foundation. Investors should carefully monitor this company and assess its potential in the long term perspective.”


Company’s site

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A cup of coffee from you for this excellent analysis.

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