1/16/2024 0 Comments Resasonable dis meaningOur updated forecasts of Disney's future free cash flows are also quite optimistic and build in a sustained turnaround for the firm, which might not come to fruition.ĭisney is about as well-known of a company there is out there. However, from our perspective, there may be more downside risk to our fair value estimate, particularly as competition in the video streaming business intensifies and consumers remain increasingly cautious with their discretionary budgets in the midst of higher inflation. If the number of Disney's video streaming subscribers re-accelerates and spending at its parks and resorts expand to levels greater than our expectations, the firm may warrant a higher valuation. The biggest risks to our updated fair value estimate of Disney's shares are of both the upside and downside variety. In this article, we'll explain why we no longer think Disney's shares are cheap-as our new fair value estimate stands about in-line with where shares are currently trading-provide an update on some recent developments, and explain why investors should expect a "market return" from shares, despite the firm's heavily depressed share price from peak levels in 2021. The biggest changes since then have been the firm's continued struggles in the video streaming business, further weakness in the linear television market, and the return of CEO Bob Iger. The last time that we wrote about Disney ( NYSE: DIS) on Seeking Alpha was all the way back in November 2022 in this article.
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