Why Walt Disney DIS is a Top Stock for the Long-Term
Disney has an unbeatable trove of intellectual property, and the company should find its way to the other side of this morass. Meanwhile, Iger’s contract recently was extended through 2026, showing Disney’s board has https://www.forexbox.info/get-backed-craft-your-story/ confidence. The Berkshire Hathaway CEO is known for saying, “When a manager with a reputation for brilliance tackles a business with a reputation for bad economics, the reputation of the business remains intact.”
Revenue was flat versus a year ago at $23.55 billion but earnings of $1.22 per share easily passed the $0.99 that analysts were expecting. Cost-cutting measures have taken hold faster than expected and management said it expects to exceed its goal of $7.5 billion in cost cuts set in 2023. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
Now, his pivot to possibly unwinding Disney’s assets shows how much things have changed for the entertainment giant and for Iger. Iger earned a reputation as Hollywood’s consummate dealmaker, acquiring Pixar, Marvel, and LucasFilm/Star Wars, a hit list of brands chock-full of intellectual property that has paid off handsomely for Disney. The deal with Fox was his most expensive all types of forex brokers in 2023 acquisition, but the verdict is still out on that one. Additionally, Walt Disney’s earnings are expected to grow 21.5% for the current fiscal year. The Motley Fool has positions in and recommends Walt Disney. On top of earnings, Disney announced a $1.5 billion investment in Fortnite maker Epic Games and said ESPN will launch a completely rebuilt app over the top in fall 2025.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. If you’ve been keeping tabs on DIS, now may not be the most optimal time to buy, given it is trading around its fair value. If the current business is finally starting to turn around and Disney adds games and streaming apps in the future, this could become a growth company once again. For now, investors are believing in the turnaround at Disney and that’s why shares are up big on Thursday.
Walt Disney (DIS -0.71%) reported fiscal first-quarter 2024 financial results for the period ended Dec. 30, 2023, after the market closed on Wednesday and investors liked what they saw. Shares were up 12.7% in early trading on Thursday and are still up 11.8% at noon E.T. If you’re a beginner investor, the idea of creating a portfolio from the ground up can feel like an impossible goal to achieve.
- Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
- The Berkshire Hathaway CEO is known for saying, “When a manager with a reputation for brilliance tackles a business with a reputation for bad economics, the reputation of the business remains intact.”
- Even Netflix, the streaming pioneer, though profitable, burned billions in cash annually for years in an effort to build a membership base of more than 200 million that allows it to turn a profit.
- Iger earned a reputation as Hollywood’s consummate dealmaker, acquiring Pixar, Marvel, and LucasFilm/Star Wars, a hit list of brands chock-full of intellectual property that has paid off handsomely for Disney.
If you are no longer interested in Walt Disney, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Six analysts revised their earnings estimate higher in the last 60 days for fiscal 2024, while the Zacks Consensus Estimate has increased $0.18 to $4.57. Even Netflix, the streaming pioneer, though profitable, burned billions in cash annually for years in an effort to build a membership base of more than 200 million that allows it to turn a profit. In fact, Disney has underperformed the market over any time frame over the last 10 years, and it’s no secret why.
Why Is Disney Struggling? This Warren Buffett Quote Explains It Perfectly
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. All these stock splits work out as 1 share purchased at IPO being the worth 384 shares today. Selling off the traditional TV assets will put even more pressure on the streaming division, and Disney doesn’t expect streaming to be profitable until the end of fiscal 2024 or next fall. However, those thinking that the stock is a bargain just because the price is low may have a long wait until it rebounds.
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The company has struggled with the transition from linear TV to streaming, which was hastened by the pandemic. As Buffett observes, for Iger, there’s no silver bullet here. The streaming industry has overspent on content and will need a significant correction in order for these companies https://www.day-trading.info/bofa-securities-makes-big-changes-to-us-1-list-of/ to generate a profit in online media. A business with no growth and wide losses is a recipe for disaster, and that’s the conundrum that Iger is trying to solve. One nugget of wisdom from Warren Buffett shows why even Hollywood’s most respected chief may not be up to the task.
The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. According to our valuation model, Walt Disney seems to be fairly priced at around 9.03% above our intrinsic value, which means if you buy Walt Disney today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $98.82, there’s only an insignificant downside when the price falls to its real value. Since Walt Disney’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market. In August 2011 Disney saw it’s stock price drop nearly 14% in one day after a number of multiple analysts downgraded it.
Walt Disney Analyst Opinions
That’s why you should start by looking at stocks that are set to beat the market over the next 12 months, a strategy that’s been proven to generate strong returns. Iger surprised the market with another announcement just last week, telling CNBC that its traditional TV networks “may not be core to Disney,” leaving the door open to a potential sale of assets like ABC. As for ESPN, Iger said the company may search for a strategic partner for its sports media empire, which could include a joint venture or selling an ownership stake. Burbank, CA-based Walt Disney Company has assets that span movies, television shows and theme parks. Three factors drove the media stock higher and they set the company up for even more long-term success.
Walt Disney Insider Activity
Disney’s stock price dropped nearly 70% of its price value in the near 2 year period between late 2000 and late summer 2002. Which outpaced the drop of many other non-tech stocks which fell about half the amount during that time. 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.
