Opinions
Christine Poole
Walt Disney Co.
DIS-N
BUY
Oct 11, 2017
Stock price when the opinion was issued
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Spike in stock is due to fears of an economic slowdown being put at bay. Theme parks are expanding, but will depend on macro environment. ESPN is more challenged. Disney+ is challenged because NFLX is beating everybody. Paying 20x PE for 12-13% growth. Doesn't dislike the name, but some segments are having a tough go.
Mixed 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%.
Streaming 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.
She is buying this for her new clients. The media sector as a whole has had an overhang, in terms of how people are consuming media and how it is going to be priced going forward. What they have going for them is their content and the type of content. ESPN is a big overhang, because people are streaming and not buying the big cable packages. Sports is a type of medium that people generally want to watch live. They announced they’re going to launch a consumer product for ESPN next year. Eventually they see it as a “pick and pay” where you can choose specific shows. They’ve also announced a consumer product for 2019 for their Disney content. For a long-term investment, this is an attractive entry point.