Financial Pros Take an Interest in Disney

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top IT Services Stock Searches in the Last Month Rank Name Searches #1 'Walt Disney 529 #2 'Netflix 311 #3 'Amc Entertainment 85 #4 'Warner Bros. Discovery 66 #5 'Spotify 54 #ad [[FREE REPORT] What Investors Are Searching]( Brought to you by [Invest with Roots]( [Why not make a real estate investment that also does good?]( [Invest with Roots - Why not make a real estate investment that also does good?]( Say “bye bye” to the old real estate investing stereotypes. Roots built a win-win ecosystem that creates wealth for both you and its residents. Learn how this model has investors up 36% in the last 2 years. [Invest now]( Financial Pros Take an Interest in Disney Disney’s (DIS) board decided to bring back the one and only Bob Iger. His first moves were to cut back on Disney+, reinstate annual park passes, and focus on profitability. But there might have been an ulterior motive. The scuttlebutt is Disney is looking for someone to buy them out. Initially, Apple (AAPL) was seen as the most prominent suitor. They have enough cash on hand to buy Disney outright. That rumor has been shot down. However, that hasn’t stopped Iger from trying to right the ship and make it valuable in its own right. And there may be something here for investors to gnaw on. Disney’s Business You all probably know who Disney is and what they do. They’re an entertainment giant with hands in cable, movies, streaming, sports, theme parks, cruise lines, and more both in the U.S. and around the world. Iger’s push to revamp Disney+ directly relates to the vertical’s performance. [Media & Entertainment] [Source: Disney Q3 ‘23 Earnings Presentation]( Linear networks (cable), the one profitable segment, saw revenues decline YoY. Meanwhile, Direct-to-Consumer (Disney+), a fairly unprofitable segment, ssaw revenues increase. However, operating losses dropped by $550 million as Iger pulled content and production to curtail costs. Content and licensing suffered as movies like Indiana Jones and The Little Mermaid live-adaptation woefully underperformed expectations. [Results] [Source: Disney Q3 ‘23 Earnings Presentation]( On the park side of the business, volume decreased at Disney Parks as more consumers traveled abroad, impacting Disney World the most. The political blowback from its fight with Florida’s governor likely affected domestic demand, though the magnitude is unclear. Higher ticket prices helped parks offset the volume impact and lift revenues overall. Financials [Financials] Source: Stock Analysis While revenues continue to climb, gross margins have fallen considerably. Disney+ has been a weight on the company ever since it began, though arguably it was a cost Disney had to bear to maintain its presence. Iger is focused on improving the bottom line, taking a $2.65 billion restructuring charge. The company’s goal is to improve costs by $5 billion overall. Despite the challenges, Disney still generates $7.5 billion in cash from operations. While that’s half of what it was before Disney+ entered the mix, it’s still well ahead of where it was in 2019. Disney has a surprisingly low amount of net debt at $35.7 billion, considering its resource-heavy operations, giving it wiggle room to spend on cost savings initiatives. Valuation [Valuation] Source: Stock Analysis Disney’s GAAP P/E ratios might look high. But remember, the company took a $2.65 billion one-time restructuring cost. That’s why the non-GAAP measure looks better. Funny enough, they’re doing way better than any of the other content companies. Outside of Warner Brothers (WBD), Disney trades at the lowest price-to-cash-flow, EV/EBITDA, and price-to-sales ratio. Growth [Growth] Source: Seeking Alpha While Disney is a better value, it doesn’t typically grow revenues at the same rate as its competitors. Spotify (SPOT), for example, boasts double-digit revenue growth for the last 5-years. The one surprising result here is Netflix’s (NFLX) revenue growth, which ran behind Disney for the last year and will continue to trail in 2023. Profitability [Profit] Source: Seeking Alpha Disney’s gross margins might seem decent. But remember, they used to be above 40% before Disney+ was added. And NFLX runs a better EBIT and EBITDA margin. However, Disney generates far more cash which is expected to improve in the coming quarters. [It's time you learn about Alternative Investments!]( Real Estate.. Private Equity… Commodities.. They can help you make a fortune. But it’s hard to figure out which to invest in. Ready to learn how to take your investments to the next level? [Sign up for The Alt for FREE.]( Our Opinion 9/10 Disney might not look like a great value at first glance. However, Iger’s determined to drop $5 billion to the bottom line, which would basically double cash flow. And he’s got a history of success at Disney. Plus, there’s always the possibility of a buyout. Given all these positives and what we see as a limited downside, we think Disney is a solid investment at these levels. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3EFatal+error%3C%2Fb%3E%3A++Uncaught+Error%3A+Cannot+use+object+of+type+stdClass+as+array+in+%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3A45%0AStack+trace%3A%0A%230+%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%28142%29%3A+get_duplicate_article_id%28%29%0A%231+%7Bmain%7D%0A++thrown+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E45%3C%2Fb%3E%3Cbr+%2F%3E?utm_medium=ic-nl&utm_source=111999 ) News & Insights Just Spilled - [Financial Pros Top Stock Search]( - [Become a better investor in just 5 minutes a day]( - [The Surprising Bank Financial Pros Picked]( - [TWLO – Fin Pros Might Be On To Something]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3EFatal+error%3C%2Fb%3E%3A++Uncaught+Error%3A+Cannot+use+object+of+type+stdClass+as+array+in+%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3A45%0AStack+trace%3A%0A%230+%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%28142%29%3A+get_duplicate_article_id%28%29%0A%231+%7Bmain%7D%0A++thrown+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E45%3C%2Fb%3E%3Cbr+%2F%3E?utm_medium=ic-nl&utm_source=111999 ) [We want to hear from you. Let us know your thoughts by clicking here]( [Ads] [InvestingChannel Logo](#) Follow us on: [Facebook Logo]( [LinkedIn Logo]( [Twitter Logo]( [Instagram Logo]( To ensure delivery of all emails, [allow us on your list](. Manage your subscriptions with our [preference center](. [Unsubscribe here.]( View our privacy policy [here](. Copyright ©2023 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc., newsletter is for information purposes only and is based on opinion. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or eliminate losses. InvestingChannel, Inc., makes no representation or implication that using any of the methodologies or systems in this newsletter will generate returns or insure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](