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The Walt Disney Co DIS

Morningstar Rating
$113.69 +1.74 (1.55%)
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Company Report

Disney: India Exit a Wise Move; Our $115 Fair Value Estimate Unchanged

Walt Disney intends to spin Star India into a joint venture that will include Viacom 18, a local competitor. Disney’s contribution to the JV, in which it will have a 37% stake, will consist of the Star India assets and some Disney content rights and licenses, for which we expect Disney will earn licensing revenue. While Disney will receive no immediate cash compensation as it would have for selling the operations outright, we think the most important aspect is that it is exiting India and should be better able to focus attention and resources on its core businesses. The Indian operations contributed minimally to our forecast, and we are maintaining our $115 fair value estimate and wide moat rating.

Price vs Fair Value

DIS is trading at a 1% discount.
Price
$113.69
Fair Value
$757.00
Uncertainty
High
1-Star Price
$533.49
5-Star Price
$85.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

No peer can match the depth of Disney’s iconic characters, franchises, or content library, which will keep the firm’s streaming services in high demand and give the firm a leg up in creating new movies and television shows.

Bears

Linear television will continue to decline. Even if successful, newer revenue sources like direct-to-consumer streaming will never equal the profitability Disney once enjoyed.

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News

Trading Information

Previous Close Price
$111.95
Day Range
$111.80114.13
52-Week Range
$78.73114.13
Bid/Ask
$113.06 / $113.69
Market Cap
$208.54 Bil
Volume/Avg
11.6 Mil / 12.9 Mil

Key Statistics

Price/Earnings (Normalized)
28.42
Price/Sales
2.34
Dividend Yield (Trailing)
0.26%
Dividend Yield (Forward)
0.79%
Total Yield
0.26%

Company Profile

Disney operates in three global business segments: entertainment, sports, and experiences. Entertainment and experiences both benefit from franchises and characters the firm has created over the course of a century. Entertainment includes the ABC broadcast network, several cable television networks, and the Disney+ and Hulu streaming services. Within the segment, Disney also engages in movie and television production and distribution, with content licensed to movie theaters, other content providers, or, increasingly, kept in-house for use on Disney’s own streaming platform and television networks. The sports segment houses ESPN and the ESPN+ streaming service. Experiences contains Disney’s theme parks and vacation destinations, and also benefits from merchandise licensing.
Sector
Communication Services
Industry
Entertainment
Stock Style Box
Large Core
Total Number of Employees
225,000

Competitors

Valuation

Metric
DIS
WBD
CMCSA
Price/Earnings (Normalized)
28.4210.54
Price/Book Value
2.070.442.01
Price/Sales
2.340.481.43
Price/Cash Flow
16.551.016.31
Price/Earnings
DIS
WBD
CMCSA

Financial Strength

Metric
DIS
WBD
CMCSA
Quick Ratio
0.690.720.50
Current Ratio
0.840.930.60
Interest Coverage
3.37−0.826.01
Quick Ratio
DIS
WBD
CMCSA

Profitability

Metric
DIS
WBD
CMCSA
Return on Assets (Normalized)
4.22%−1.76%6.32%
Return on Equity (Normalized)
8.71%−4.92%19.98%
Return on Invested Capital (Normalized)
5.86%−0.66%10.60%
Return on Assets
DIS
WBD
CMCSA
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