Walt Disney (DIS:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Walt Disney(DIS:NYS)

Consumer Cyclical:Media-Diversified

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$113.03 (USD) 21/11/2018

Weighted Valuation
$117.42 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 3.9%

Valuation Models Analyst Consensus: $118.20 (USD)
(in order of importance) Discounted Cash Flow: $114.71 (USD)
Adjusted Book Value: $120.50 (USD)
Valuation Methods This company is:
Cash Flow: Fairly valued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (DIS:NYS USD)

Price 113.03
Range 112.30 – 113.99
52 week 98.54 – 118.90
Open 112.50
Vol / Avg. 7.23M/8.2M
Mkt cap 166.38B
P/E 14.22
Div/yield 1.68/0.01
EPS 8.36
Shares 1.49B
Beta 1.18

Company Description

Walt Disney owns the rights to some of the most globally recognized characters, from Mickey Mouse to Luke Skywalker. These characters and others are featured in several Disney theme parks around the world. Disney makes live-action and animated films under studios such as Pixar, Marvel, and Lucasfilm, and also operates media networks including ESPN and several TV production studios. Disney recently reorganized into four segments with one new segment, direct-to-consumer and international. The new segment includes the two announced OTT offerings, ESPN+, and the Disney SVOD service. The plan also combines two current segments, parks & resorts and consumer products, into one. The media networks group contains the U.S. cable channels and ABC. The studio segment holds the movie production assets.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for DIS:NYS

Using a discounted cash flow model we generated an intrinsic value of $114.71 (USD) for DIS:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

DIS:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $114.71 1% 5% 1% 5%
WACC (or Ke) 9.42 $138.69 $97.21
Terminal Growth Rate 3.00 $98.99 $136.24
Tax Rate 0.11 $122.89 $106.54
Cash Flow 19,916,595,000 $106.27 $123.16
Capital Expenditures -4,087,400,000 $113.21 $116.22
Long Term Debt 20,441,000,000 $115.40 $114.03

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $261.79 (USD) for DIS:NYS. We also generated a valuation of $106.96 (USD) using other metrics and comparables.
The comparable companies were Twenty-First Century Fox (FOXA:NAS) and Netflix (NFLX:NAS).

Company DIS:NYS End Date Value
Earnings/Share $8.36 (USD)
Book Value/Share $30.73 (USD)
Sales/Share $38.11 (USD)
Cash Flow/Share $9.22 (USD)
EBITDA/Share $12.22 (USD)
Price Based on Comps Adjustment Factor (%)
$529.47 (USD) -51.6
$469.89 (USD) -40.2
$226.92 (USD) -8.2
$170.56 (USD) -51.4
$0.00 (USD) -17.8
DIS:NYS Ratios Used Average Values FOXA:NAS NFLX:NAS
14.44 PE Ratio 63.33 18.89 107.78
3.74 PB Ratio 15.29 4.32 26.27
3.01 PS Ratio 5.95 2.78 9.13
12.45 PCF Ratio 20.00 20.00 0.00
10.78 EV to EBITDA 48.33 15.39 81.26


Using a multiples approach we generated a valuation of  $130.70 (USD) for DIS:NYS

Company DIS:NYS End Date Value
Earnings/Share $8.36 (USD)
Book Value/Share $30.73 (USD)
Sales/Share $38.11 (USD)
Cash Flow/Share $9.22 (USD)
EBITDA/Share $12.22 (USD)
Price Based on Comps Adjustment Factor
$159.29 (USD) 0
$113.70 (USD) 0
$118.98 (USD) 0
$131.81 (USD) 0
$129.70 (USD) 0
Ratios Ratio Average
PE Ratio 19.05
PB Ratio 3.70
PS Ratio 3.12
PCF Ratio 14.29
EV to EBITDA 10.61

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  DIS:NYS for the last 10 years was  3.71

We ran the Adjusted Book Value for  DIS:NYS and generated a book value of  $32.52 (USD)
By multiplying these we get an adjusted valuation of  $120.50 (USD)

Analyst Data

In the Stockcalc database there are 5 analysts that provide a valuation for DIS:NYS. The 5 analysts have a concensus valuation for DIS:NYS for 2019 of $118.20 (USD).

DIS:NYS Walt Disney

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 2 1 3.7143 Outperform 2018-11-21

Current Price: 113.03 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 7.32 7.63 7.85
# EPS Analysts 7 4 2
Mean Revenue 65,555.70 63,992.80 65,825.60
# Revenue Analysts 4 2 2
Mean Target Price 118.20
Mean Cash Flow 9.61 9.51 10.31
Mean EBITDA 17,671.50 18,564.40 19,336.50
Mean Net Income 11,421.50 11,184.10 11,696.60
Mean Debt Outstanding 15,765.00 14,206.80 9,654.60
Mean Tax Rate 21.00
Mean Growth Rate 12.23
Mean Capital Expenditure 4,574.60 4,671.10 5,295.90

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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