Is Disney stock undervalued?
I’ve been seeing a lot of negative-ish news about Disney lately. Like their movies are not doing good and also Bob Iger seems to be considering selling off a lot of their assets. So today Disney’s stock price is pretty much at almost the lowest point in the last 7 or 8 years. I’m kinda tempted to buy some long dated calls on it. It’s one of the few major stocks that hasn’t gone up a lot this year. Disney is still a really really strong brand and it seems like in the long run the company should be able to overcome these issues. If they do end up announcing that they are going to sell off a bunch of stuff then maybe the stock might jump a lot. But then again, I don’t have a really deep insight into the company so I’m wondering what people’s thoughts are on this? #personalfinance #investments
They also have a lot of debt from 21st century Fox studios acquisition. But a lot of doom and gloom is priced in, so might be good at these levels, given how solid of a franchise it is.
Their parks have decreased footfalls despite reduced ticket prices. Couldn’t come up with plausible growth strategies that could potentially increase revenue and margins. So stayed away. Would love to listen to others, as I thought the same when meta was in the 100’s !
Yeah I actually bought Meta at $95 last year and then everybody was telling me it was a sinking ship, what are you doing, blah blah blah and I ended up just dumping it for like 10% profit. Then it turns out that Zuck just needed to stop mentioning Metaverse and layoff a bunch of people and now Meta is somehow looking stronger than ever.
Prices are up from last year. Check your facts @workday
The brand is strong but is suffering from a lot of political backlash (Desantis v. Iger, movies getting banned in countries, Disney workers being upset at the company, etc.). It seems like there’s significant risk of alienating multi-generational fan-bases, and the brand not gelling well across socio-political borders. I can’t make any determinations on buy/sell, but those are some factors contributing to the current price environment that’s seen in the stock.
It's mostly middle aged men complaining on YouTube. Problem if you are Bud Light, not so much if you are Disney. Kids love Disney stuff.
>Kids love Disney stuff Uh, no they don't https://www.youtube.com/watch?v=J0fhWism4LA
Forget about Disney for now and check back on it in Nov or Dec. Focus on Target Stock now TGT 🚀
It’s highly under valued. The moat they have is irreplaceable. Disney has great franchise- marvel, nat geo, Star Wars, cruises, hotels, parks, merchandise, Hulu, espn, cable tv like abc and yet it’s market cap is less that Netflix, which always boggles my mind. The library of content and ip Disney has is crazy, 100 years!
Company is currently valued at just the value of their theme park business. Everything else is a bonus. It’s cheap here, but it’s not going to be a home run either. Their ability to reinvest capital at a reasonable rate of return is long since past, so it may be worth 50% more than the current price, but it’s not going to be a case like Nvidia where it has a chance to suddenly be worth 10X as much in 5 years.
Yeah you’re right there’s no way it’s going to turn into a $400 stock anytime in the near future unless build 50 more theme parks around the world or something.
lol thinking the same thing and came across your post.
david
Streaming business is not profitable and won’t be. Too much competition from Netflix. Streaming is opex heavy and eating into existing cash flows. Profitability has declined and revenues are similar to what they were 5 years ago. So no, it is fairly valued. If you factor in microeconomic, it is overvalued. It has too much of debt and we are in high interest rates environment.
Right so I think Disney Plus is the one big problem that’s costing them a fortune and damaging their balance sheets. But it also seems like the news outlets are reporting that Bob Iger is heavily looking into selling off some of Disney’s digital/streaming assets. I think my thesis is that one day in the not too distant future they will announce that they are selling or somehow cutting down on streaming expenses and then the stock will jump. But I don’t know if I’m being a bit naive there.