Last Updated: 15 Sep 2024
Executive Summary
Walt Disney Company (DIS) is a global entertainment and media conglomerate with a strong financial position and a track record of innovation. The company's diverse portfolio of businesses, including theme parks, film and television production, and consumer products, provides it with a competitive advantage. While the company faces challenges in the streaming market, its strong brand and loyal customer base position it well for long-term growth.
Company Overview
The Walt Disney Company was founded in 1923 and has since grown into one of the world's largest entertainment companies. The company's operations are divided into four segments: Media Networks, Parks, Experiences and Products, Studio Entertainment, and Direct-to-Consumer and International.
Fundamental Analysis
Revenue: Disney's revenue grew by 3.7% year-over-year to $90.03 billion in the fiscal year ended September 2023. The company's Media Networks and Parks, Experiences and Products segments were the primary drivers of growth.
Earnings: Diluted EPS increased by 48.6% to $2.61 in the fiscal year ended September 2023. This growth was primarily driven by cost-cutting measures and increased revenue from Disney's streaming services.
Profitability: Disney's profit margin was 5.3% in the fiscal year ended September 2023, up from 4.7% in the previous year. The company's operating margin also improved, from 13.8% to 14.9%.
Balance Sheet: Disney has a strong balance sheet with $12.6 billion in cash and cash equivalents and $52.8 billion in total debt. The company's debt-to-equity ratio is 0.64, which is considered to be a manageable level.
Technical Analysis
Trend: Disney's stock price has been in a downtrend since reaching a 52-week high of $123.17 in March 2023. The stock is currently trading below its 50-day and 200-day moving averages.
Support and Resistance: The stock has support at $85.00 and resistance at $95.00. A break above resistance could signal a potential reversal of the downtrend.
Volume: Trading volume has been increasing in recent weeks, which could indicate that a breakout is imminent.
Short Term Outlook
In the short term, Disney's stock price is likely to be influenced by the company's upcoming earnings report and the overall performance of the streaming market. If Disney can continue to grow its streaming revenue and control costs, the stock could see a rebound. However, if the company faces challenges in the streaming market or if the overall market continues to decline, the stock could continue to trade lower.
Long Term Outlook
In the long term, Disney's strong brand and loyal customer base position it well for growth. The company's diverse portfolio of businesses provides it with a competitive advantage, and its investment in streaming services is expected to drive growth in the future. However, the company faces challenges in the streaming market, and competition from other entertainment companies is likely to intensify.
Analyst Recommendations
The majority of analysts have a buy or strong buy rating on Disney's stock. The average analyst target price is $111.08, which represents a potential upside of 23% from the current price.
