Forget politics. Forget DCF. Just look at DIS’s ratios. Its PE is 62.3x compared to the US Entertainment industry average of 20.9x and the broad market’s 15.6x. (Ouch! Peter Lynch wouldn’t look at anything over 15x.) DIS’s PEG is a high 2.8x. PB is 2.2x compared to the industry average of 1.7x. In short-- as you said-- DIS is very “expensive”.
Looking at a simple metric such as current PE seems very short sighted with Disney - who are in investment mode and coming out of a global pandemic. TTM EPS is $2.28 per share, but they seem very capable of earning $8.00 in a “normal year”. If you think things can return to normal then the stock looks cheap! $110 / $8.00 = 13x. Even if you think Disney+ is going to require a lot of investment and knock earnings down to $6.00 per share the multiple is still under 20x.
They just pulled in $1.09 in earnings this quarter, which is up $0.49 for the same quarter last year; so things look to be returning to a more normal state soon.
tecmo
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