Walt Disney (DIS) Could Be 13% Undervalued On TV And Streaming Restructuring

Simply Wall St · 2d ago

Walt Disney (DIS) is shaking up its TV and streaming operations by merging units such as ABC Entertainment and Hulu Originals, raising ad free Disney+ and Hulu prices, and cutting additional jobs to sharpen its focus on profitability.

Recent moves to reshape TV, streaming, and costs come against a mixed price backdrop for Walt Disney. The 90 day share price return of 13.99% points to improving momentum, even though the year to date share price return is down 2.02% and the 5 year total shareholder return has declined 34.29%.

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After a 90 day climb and years of weaker long term returns, Walt Disney now sits closer to many analysts' estimates. The real puzzle is whether the recent restructuring still leaves meaningful upside on the table or already prices most of it in.

Most Popular Narrative: 13% Undervalued

With Walt Disney last closing at $109.59 against a widely followed fair value view of $126.61, the current restructuring story is being weighed against what analysts see as a long runway for its Experiences and streaming businesses under a 9.7% discount rate.

The global expansion of Disney's cruise and theme park businesses, with major investments in new ships and park attractions, including recent capacity additions that management says still do not satisfy current demand, is expected to support Experiences revenue growth and contribute to higher earnings over time.

See why 388 investors see Walt Disney as 13% undervalued.

Result: Fair Value of $126.61 (UNDERVALUED)

Still, the bullish Walt Disney script can unravel quickly if streaming ad softness lingers, or if consumer weakness at the Shanghai and Hong Kong parks persists.

Find out about the key risks to this Walt Disney narrative.

Next Steps

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