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Is Disney a buy?

It’s time to breakdown one of the most well-known brands in the world! Here is the breakdown on $DIS, otherwise known as Disney.

Current Price: $175.00

52/Wk High: $183.40

52/Wk Low: $79.07

Market Cap: $316.8 Billion

Read below for the breakdown!

Disney ($DIS) is one of the most well-known entertainment companies in the world boasting one of the largest production studios, theme parks, and a rapidly growing collection of popular streaming services and channels.

In recent news, Disney released both earnings and huge news on the streaming front. At Disney’s investor conference the company blew investors away, reporting 86.8 million Disney Plus subscribers, 38.8 million Hulu subscribers, and 11.5 million ESPN plus subscribers.

Not only that, but Disney announced new guidance and now expects to attain 300 to 350 million subscribers across all three core services by the end of FY 2024.

To reach their goals, Disney dropped a huge slate of upcoming content, including ten Star Wars series, ten Marvel series, 15 live-action features, and 15 live-action series.

Given Disney’s recent announcements investors are excited, with a substantial amount of evidence to back their bullishness. According to eMarketer forecasts Disney is set to hit $12.36 billion in streaming revenues by 2022.

Rounding out Disney’s most recent announcements, investors were pleased to hear that Disney will be raising subscription prices, with the company announcing subscription hikes across all their platforms starting March of 2021.

Shifting into the stock price, the price itself can be broken down by company segment. According to TREFIS (@trefis) 36.82% of Disney’s stock price is based on the company’s Media Networks segment.

Furthermore, 28.16% on the Direct-to-consumer & International segment, 22.78% based on the Parks, Experiences, and Products segment, and 12.2% of the stock price is based on the company’s Disney Studios segment.

Digging into the most recent quarter Disney beat expectations, delivering an EPS of $-0.20, much better than the expected EPS consensus estimate of $-0.70. On a year over year basis EPS declined -118.69%.

As for revenues, Disney reported Q4 revenues of $14.707 billion, representing a major year over year decline of -23% from the same time 2019 revenues level of $19.118 billion.

Disney went on to report a total segment operating income of $606 million (down 82% YoY) and a net income from continuing operations level of $-710 million, much less than the same time 2019 net income level of $777 million.

Shifting into the balance sheet, Disney has added a significant amount of debt in recent years.

Total Debt: $58.936 Billion

Total Liabilities: $117.966 Billion

Total Assets: $201.549 Billion

Cash & Short Term Inv: $17.914 Billion

On a valuation basis, Disney is definitely above-average levels.

Price to Sales: 4.88x

Price to Book: 3.75x

Price to Cash Flow: 111.34x

Management has done a solid job navigating the COVID-19 crisis.

Return on Equity: -3.28%

Return on Assets: -1.23%

Return on Invested Capital: -1.58%

Given the numbers, the analysts are turning bullish on Disney with a mean price target of $186.83/share, representing a 6.52% gain.

It is also important to note that the high price target is $210.00/share, representing a 19.73% gain, while the low price target is $155.00/share, representing a -11.63% loss.

The big money is also quite involved with 62.83% of Disney being owned by institutions. Top holders include The Vanguard Group, BlackRock Institutional Trust, and State Street Global Advisors.

On a technical basis, Disney could be presenting an opportunity. According to the six-month charts, the MACD recently crossed back to the downside after a huge run with minimal downside momentum within a range of 6.72 down to 5.17.

The six-month charts are also indicating an RSI of 59.47 and CCI of -1.85, both of which are continually trending down.

In short, Disney is a solid name considering its rapidly growing streaming segment, theme parks that give the stock a comeback play angle, and an iconic brand the continues to turn out digital content consumers love.


Disclaimer: This is not direct financial advice, simply an opinion based on independent research.

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