Market Analysis

The Walt Disney Company (NYSE:DIS)
Share Price as of August 16, 2024: US$89.30

Average Upside Potential: 25.98%

The Walt Disney Company (NYSE:DIS) is an entertainment and media enterprise company. The company carries out operations through segments such as media networks, parks and resorts, studio entertainment, consumer products, and interactive media.

The Walt Disney Company (NYSE:DIS) possesses a well-defined economic moat. The company owns brands like Marvel, ESPN, Lucasfilm, and Pixar. Collectively, all these brands form a composite group of dominating market characters. Therefore, the company’s ownership of timeless characters and franchises together with its ability to create top-tier content should continue to give it a leg up.

A downturn might temporarily impact the revenues from movies or theme parks, but it should be for the short term. In the long term, given its share and market-leading characters, consumers will return to its movies, parks, and merchandise.

In 3Q 2024, the company’s revenue came in at $23.2 billion, reflecting an increase of 4% YoY. This was mainly because of 2% growth in the Experiences segment and 4% growth in the Entertainment division. Its Adjusted earnings per share went up by ~35%.

The Walt Disney Company (NYSE:DIS)’s long-term prospects appear to be even more promising given its improved streaming segment results. The subscriber growth and higher monthly subscription costs for DTC services supported the company’s streaming segment to post a quarterly operating profit as compared to the prior-year period. Its entertainment business posted operating income of $1.20 billion in 3Q 2024.

In the coming years, the company will make significant investments in the United Kingdom and continental Europe. These investments will focus on producing movies and television shows for the big screen and its streaming platform, Disney+.