Opinions Andy Nasr
Walt Disney Co.DISCOMMENTSep 08, 2015
Stock price when the opinion was issued
As of Jun 04, 2026. Market Open.
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Has become the victim of a sort of new wokeism, which alienated a big chunk of consumers. He sold. Challenge is the franchise is one of a kind, but management keeps making mistakes.
Inexpensive here, if you have a long horizon. Reasonable value, but no immediate catalyst. Business is good, it just needs to find the next CEO with the right vision; when they get that right, the stock will move.
It's a good company, doing the right things. People still want to go their theme parks and cruise ships. Their streamer is doing a good job, taking the baton from linear TV. The stock looks like 2021 during the pandemic. Revenues and EPS are growing above 10% in each of the next two years, is trading at 14x PE and a dividend growing like crazy. But not it's uncomfortable to hold this stock, but you will be rewarded if you are patient.
He bought more on this AI sell-off. How will AI disrupt/replace their theme parks? With this sell-off, you can buy great companies at great prices which seldom happens.
Jim Lebenthal
You have to appreciate its brand power. Does something that no one else in the world can or does, and they do it very well. Lots of avid fans.
That said, not sure its valuation is merited. Cost of running theme parks is very high, and probably getting higher. In an economic slowdown, people may not pay those prices. Media assets are in constant competition. He's a value investor. Wait for a pullback.
It's been consolidating and has to outperform earnings to break out which he expects, given strong theme parts and streaming. It's neither cheap or pricey at 20x PE.
Jim LebenthalStreaming turned profitable by end of 2024, finally, after a reorganization, and is now a major growth driver. Theme parks have been the largest profit generator and they keep coming out with new parks; people are paying high amounts to enjoy them. He expects healthy earnings to come. They will announce a deal between their ESPN and the NFL--sports drives huge profits. Everything is going right, but they need to appoint a successor to Bob Iger.
Lorne SteinbergMixed feelings. On the positive side, doing exceptionally well in streaming with a great library and great branding. Cross-sells better than anyone. Worried about the parks in the short term -- consumer slowdown, expecting global backlash against the US. Hard to bet against its 6-decade growth story for the long term. Balance sheet in fine shape, decent cashflow. Yield is 0.8%.
Stock has sold off. A lot of people get concerned about “cord cutting” (getting rid of cable). The “cord cutting” issues are not going to go away anytime soon. TV households in the US are at about 100 million, and if you take a really bearish view, the number of households that cut the cord could increase to 30 million, more than double, within the next 4-5 years. That has very, very negative implications for media companies and their ability to monetize their content. This is giving you a pretty good buying opportunity if you are a long-term oriented investor. However those secular growth concerns are not going to go away anytime soon. The short term catalysts are the Star Wars movie and Shanghai Disney opening up in 2016. Use any capital appreciation on the back of these 2 events to eventually lighten up, and then maybe move into a cable company where you are getting a cord cutting hedge, because in the event people do cut the cord, they can bump up their broadband pricing.