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4 Reasons to Buy Walt Disney Stock Like There’s No Tomorrow The Motley Fool

By Ramanand

Investors of record on Monday, July 8th will be given a dividend of $0.45 per share on Thursday, July 25th. The Walt Disney Company is the world’s second-largest entertainment company by revenue and market cap. It is built on the work of Walt Disney, a revolutionary entertainer and cartoon innovator, and is now a multinational conglomerate of entertainment venues, channels, and brands. The company was founded in 1923 as the Disney Brothers Studio and operated under several other names before being branded as The Walt Disney Company in 1986.

If you had invested $1,000 in Disney’s IPO your stock today would be worth over 3 million dollars today.

In retrospect though, it appears the success was more about the franchises and intellectual property — Star Wars and Marvel’s Avengers — than the filmmaking itself. The media giant’s latest movies have been subpar, and its film business has also regularly been unprofitable. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on, top-rated podcasts, and non-profit The Motley Fool Foundation.

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  2. In retrospect though, it appears the success was more about the franchises and intellectual property — Star Wars and Marvel’s Avengers — than the filmmaking itself.
  3. The films being released right now are still largely those that were started under Iger’s predecessor.
  4. The company has moved beyond the historical view of a brand that children recognize and parents trust by acquiring and creating new franchises and intellectual property.
  5. Bob Chapek has an approval rating of 77% among the company’s employees.

On balance though, for the first time in years, there’s good reason for investors to be cautiously bullish on this stock. Disney’s management has identified its problems and launched solutions to fix them. But waiting until they’re completely resolved could mean missing out on the bulk of any brewing recovery for the stock.

After Earnings, Is Disney Stock a Buy, a Sell, or Fairly Valued?

The author or authors do not own shares in any securities mentioned in this article. With its 4-star rating, we believe Disney’s stock is undervalued compared with our long-term fair value estimate. Walt Disney announced a semi-annual dividend on Wednesday, February 7th.

Making movies is a hit-or-miss business, which could result in big swings in profitability for the filmed entertainment segment. The firm is increasingly tied to blockbuster films, making these swings even larger. Disney’s results could suffer if it cannot adapt to the changing media landscape. Basic pay TV service rates have continued to increase, which could cause consumers to cancel subscriptions or reduce their level of service. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed.

We expect fiscal 2023 admissions revenue will remain ahead of fiscal 2019, despite consumer worries about the economy and inflation. We project that merchandise, food, and beverage revenue will see similar growth, as will resorts revenue. The parks and consumer segment suffered a 37% decline in revenue in fiscal 2020 and a 3% decline in fiscal 2021. Following a strong bounce back of 73% in 2022, we expect more normalized growth of 5% over the next five years. The Disney Parks, Experiences, and Products segment includes a network of theme parks, resorts, and cruises under the Walt Disney World and Disneyland banners. Parks include the flagship Walt Disney World in Florida, Disneyland Paris, and Hong Kong Disneyland Resort.

Stocks to Buy Right Now for the Coming Recession

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Disney Historical Price/Fair Value Ratio

Walt Disney DIS appears likely to bottom out at or just above its monthly value level for July at $85.02. The stock is below a death cross on its daily chart with its 50-day and 200-day simple moving averages at $92.11 and $96.79. The weekly chart shows Disney oversold and a weekly close above its five-week modified moving average at $90.89 would be a positive. This segment also hosts streaming services including but not limited to Disney+, ESPN+, Hulu, and Star+ as well as post-production services by Industrial Light & Magic and Skywalker Sound. The contagion reshaped the entertainment industry landscape by accelerating the growth of competing streaming services while at the same time permanently damaging the theatrical film business. Like most of its peers, Disney wasn’t ready for the rapid change.

There’s also no denying the ongoing cable cord-cutting movement is working against Disney — a headwind that may not be fully offset by the intended 2025 launch of a standalone streaming version of ESPN. Then, there’s its incredible catalog of film classics ranging from Snow White and Sleeping Beauty to more modern franchises like the aforementioned Avengers and Star Wars series. Even Trian believes Disney has “unparalleled assets and opportunities and every reason to grow and prosper.” It just hasn’t been using capitalizing on them all that well of late. When Disney first launched its flagship streaming service Disney+ back in 2019, profits weren’t a concern. The media giant’s first goal was establishing market dominance. Making the platform profitable would be something for down the road.

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Walt Disney also owns television network AMC and several other cable channels including National Geographic and FX. 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 eur to dkk exchange rates euro which we expect Disney will earn licensing revenue. The Indian operations contributed minimally to our forecast, and we are maintaining our $115 fair value estimate and wide moat rating. The media network component also includes the Disney Channel, one of two dominant cable networks for children, which allows the firm to introduce and extend its strong content portfolio.

23 Wall Street analysts have issued “buy,” “hold,” and “sell” ratings for Walt Disney in the last year. There are currently 1 sell rating, 3 hold ratings and 19 buy ratings for the stock. The consensus among Wall Street analysts is that investors should “moderate buy” DIS shares. The company’s ad-supported broadcast networks, along with its theme parks and consumer products, will suffer if the economy weakens. Disney has mastered the process of monetizing its world-renowned characters and franchises.

Disney stock has been a part of six stock splits since the IPO,The first post IPO stock split happened in 1967 which was a 2 for 1 stock split. There were two more 2 for 1 stock splits shortly after in 1977 and 1973. The next stock split happened over a decade later in March 1986 when a 4 for 1 stock split took place. The 90s brought two more stock splits, one 4 for 1 in 1992 and then a 3 for 1 stock split in the summer of 1998.