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High-Quality Disney No Bargain

A strong earnings report has catapulted Disney’s shares, but we’d wait for a larger discount to our fair value before investing, writes Morningstar’s Neil Macker.


 Disney (DIS) started fiscal 2015 with another strong quarter, with results coming in ahead of our expectations. The company also announced its Shanghai resort will open in spring 2016. We maintain Disney's wide economic moat rating and its $95 fair value estimate.

While we expect Disney to continue to execute and increase the top and bottom lines, we remain sensitive to valuation. The shares currently trade in 3-star territory and at approximately 20 times our fiscal 2015 EPS estimate. We reiterate our view that Disney is a high-quality business, but we'd wait for a larger discount to our fair value estimate before getting excited about investing.

Neil Macker does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.