What is Fair Value for DIS?

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‘Fair Value’ --also known as ‘Intrinsic Value’-- for DIS is around $246, right? as anyone who even pretends to make investing decisions on the basis of “fundamentals” can calculate for her or himself, using any of the standard, well-documented methods. (Or the estimate can be looked up in any of dozens of places.) Why, then, did DIS close down again today ($113.66 in after hours trading), losing (-7.5%) in the last 7 days and (-37.2%) YTD? Why is DIS being sold down?

For sure, it isn’t most healthy of companies, due to its ST assets not covering its LT liabilities, its debt having increased from 43.5% to 52.#% over the 5 five years, and not having its interest on that debt well covered by EBIT. Additionally, DIS’s rev/yr is forecast to be only 8.8%, and its return on equity only 11.7%. But --perhaps-- the real reason the stock is being sold down is the elephant in the room that the longs want to avoid talking about, namely, that Disney has chosen to become an advocate and exemplar of socio-cultural policies most people find offensive, if not abhorrent.

Thus, though a company’s “politics” aren’t normally considered to be part of its “fundamentals”, Disney has chosen to make them so, and it is suffering the consequences.

Arindam

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Arindam,

Thus, though a company’s “politics” aren’t normally considered to be part of its “fundamentals”, Disney has chosen to make them so, and it is suffering the consequences.

There’s a LOT else going on that’s affecting the whole market – the war in Ukraine apparently now spilling into Russia, the pinch consequent in the supply of petroleum and natural gas causing cost of fuel, and thus everything else, to escalate, triggering high inflation, and a blundering administration that certainly has not dealt effectively with any of it. The consequent economic hardship clearly translates market expectation that many families choosing less expensive alternative vacations, or even “staycations,” over trips to Disney’s (and other) resorts, fueling a drop in the stock that would be much larger than the drop in the overall market. I don’t know how to separate any possible drop from the company’s “woke” politics from the drop associated with these other considerations.

Norm.