Resources For TV Channel Developers

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The Walt Disney Company (NYSE:DIS) is poised for the future with the launch of Disney+ and the recovery of theme parks. This multinational media conglomerate, most famous for its theme parks and movies, is expanding into the direct-to-consumer streaming model with great early success with its new Disney+ family of products. With COVID-19 lockdowns ending, parks and cruises are reopening and seeing surging numbers, increasing revenues. Despite all this, coverage remains heavily focused on the value of Disney+ and its family of products in the direct-to-consumer segment, which we believe has caused people to miss the forest for the trees. Disney is still a massive, multinational entertainment giant and the primary focus is still the continued expansion and operation of its theme parks and related experiences.

Here's the estimated value of the core business (excluding direct-to-consumer):

• Normalized earnings power of Disney: $8.00
• Normalized PE of Disney: 20
• Core Disney = $8.00 * 20 = $160
• Direct to Consumer (Disney+, ESPN+, etc.): $30 to $46 per share (detailed below vs. NFLX)
• DIS total $190 to $206 per share

However, we believe that the embedded value of Disney's direct-to-consumer streaming options with their massive subscriber growth adds incremental value to the stock and the existing business. The streaming business is not yet profitable but has a value which we detail below. As a result, we give Disney a buy rating, especially for long-term growth investors at a price point below $145.

Pricing in Direct-To-Consumer