After taking a critical look at Disney, we are reducing our fair value estimate to $115 from $145 while maintaining our wide moat rating and revising our Morningstar Capital Allocation Rating to Standard, from Exemplary. We believe the stock remains undervalued, but we think the move away from linear television viewing by consumers will keep Disney’s performance from returning to its past glory.
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.
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.
|
Metric
|
DIS
|
NFLX
|
CMCSA
|
|---|---|---|---|
Price/Earnings (Normalized) | 24.56 | 43.46 | 10.69 |
Price/Book Value | 1.71 | 9.22 | 2.07 |
Price/Sales | 1.91 | 6.42 | 1.47 |
Price/Cash Flow | 17.49 | 30.10 | 5.86 |
|
Metric
|
DIS
|
NFLX
|
CMCSA
|
|---|---|---|---|
Quick Ratio | 0.85 | 1.08 | 0.56 |
Current Ratio | 1.05 | 1.29 | 0.70 |
Interest Coverage | 3.03 | 8.64 | 5.97 |
|
Metric
|
DIS
|
NFLX
|
CMCSA
|
|---|---|---|---|
Return on Assets (Normalized) | 3.90% | 10.66% | 6.41% |
Return on Equity (Normalized) | 8.19% | 24.26% | 20.23% |
Return on Invested Capital (Normalized) | 5.58% | 16.63% | 10.66% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|
NFLX
| Netflix Inc | Yjjdvd | $203.8 Bil | |
WBD
| Warner Bros. Discovery Inc Ordinary Shares - Class A | Xlkvq | $27.6 Bil | |
LYV
| Live Nation Entertainment Inc | Jmmzchg | $19.4 Bil | |
SIRI
| Sirius XM Holdings Inc | Mnbzzl | $18.7 Bil | |
WMG
| Warner Music Group Corp Ordinary Shares - Class A | Ldhvl | $17.8 Bil | |
FWONK
| Liberty Formula One Group Registered Shs Series -C- Formula One | Cwzsfy | $14.8 Bil | |
FWONA
| Liberty Formula One Group A | Rqqxh | $14.8 Bil | |
ROKU
| Roku Inc Class A | Dfhwn | $14.8 Bil | |
FOX
| Fox Corp Class B | Xdgst | $14.1 Bil |
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