How Far Can Disney Go?

[View in browser]( [The Spill Logo] Proprietary Data Insights Financial Pros’ Top Entertainment Stock Searches in the Last Month Rank Ticker Name Searches #1 [DIS]( Walt Disney Co. 219 #2 [NFLX]( Netflix 199 #3 [CMCSA]( Comcast Corp. 43 #4 [PARA]( Paramount Global 38 #5 [CHTR]( Charter Communication 23 #ad [Decoding Your Finances: The Juice Edition]( Brought to you by [Stock Investor]( [How options give me an extra DAILY paycheck]( [Stock Investor - How options give me an extra DAILY paycheck]( What if you could trade one simple option, once a day... be done in 10 minutes... and have a 96% chance of winning? And here’s the thing: This option trade is so simple, it took me about an hour to learn. Yet some people get college degrees and don’t make this much. [So, click here if you want to see how to make an extra daily paycheck, easily and reliably](. Disney Dominates With Room to Grow Financial pros went gaga over Disney’s latest earnings report. CEO Bob Iger shut down critics by delivering a huge earnings beat as losses on streaming services halved. And it couldn’t come a moment too soon. Plagued by dwindling box office sales and activist calls for change, Disney was in dire straights. But according to our TrackStar data, financial pros continued searching for Disney’s stock and earnings call related content. They wanted to see just how far Disney could go. After all, the stock was over $200 back in 2021. And there’s a good chance it might get there again. Disney’s Business Born in California, raised in Florida, Disney is an entertainment giant circling the globe. From theme parks to Marvel movies, its brand is synonymous with success. The business breaks down into three main segments: - Entertainment (45% of total revenues) - Encompasses the production and distribution of film, television, and streaming content across various platforms. - Parks, Experiences and Products (35% of total revenues) - Includes its theme parks, resorts, cruise lines, and merchandise. - Media Networks (20% of total revenues) - Comprises broadcast and cable television networks, television production operations, television distribution, domestic television stations, and radio networks. Disney’s recent troubles began under the previous CEO Bob Cheepak. Streaming services burned cash while iconic brands from Star Wars to Marvel lost their luster. The pandemic didn’t help theme park attendance any. Bob Iger, Disney’s former CEO, was brought in to right the ship. He immediately took action, putting the company on track to cut costs by $2 billion. The latest quarter showed progress towards these goals, while Iger introduced new ways to approach entertainment. Disney inked a collaborative deal with Fox to create a premium sports network as well as a planned ESPN standalone service. It took at large stake in Epic Games, the makers of Fortnight. And the company promised to create more standalone movies rather than beating franchises to death. [Disney building] [Source: Disney Q1 2024 Earnings Presentation]( Everything culminated into a huge earnings beat, even if revenues weren’t all that spectacular. Financials [Financials] Source: Stock Analysis Disney’s financials look a bit odd with revenues climbing while gross margins collapsed. But when you realize the company began its streaming in 2018-2019, it makes sense. Streaming has been a perpetual loser, even if it grew revenues. The good news is Disney has stabalized its profitability. Operating cash flow was over $14.3 billion in 2018. In 2019, it shrank to $6.6 billion. Today, it’s back up to just over $13.0 billion with Capex only slightly higher at $5.1 billion. Notably, Disney cut its dividend and share buybacks in 2021 to conserve capital, only recently reinstituting it. Valuation [Valuation] Source: Seeking Alpha Traditionally, Disney garnered a premium valuation. That’s still somewhat true, but with caveats. Companies like Comcast (CMCSA) and Charter Communications (CHTR) have larger legacy cable businesses rapidly shrinking. Netflix (NFLX) is closer to Disney in terms of streaming, but command an even higher premium. At 15.6x cash and 28.9x forward earnings, Disney isn’t expensive, especially if you believe in the turnaround. Growth [Growth] Source: Seeking Alpha Disney’s revenue growth has been lackluster. But as the free-cash-flow growth shows it has done phenomenal improving its operations. The same is evident when looking at its EBIT 3-year CAGR. No other company comes close to these numbers. Profitability [Profit] Source: Seeking Alpha While Disney’s gross margins are towards the bottom of the pack, they’re improving, and we expect to keep getting better. Ideally, this should boost the company’s EBIT margin by as much as 50%-100% by 2025-2026. [50-year Wall Street Insider Names #1 stock for AI “Tidal Wave”]( Microsoft’s CEO Satya Nadella says A.I. is a “tidal wave.” One with even more potential than the internet. This is a huge claim. The internet generated more wealth than any other innovation in history - creating hundreds of thousands of new millionaires in America alone. Now A.I. could do the same. But if you’re buying Microsoft or NVIDIA to profit - you’re missing the big picture. After 50 years on Wall Street, I’m going public with another way to profit on the coming $7 trillion A.I. boom. This method has already uncovered multiple stocks that have gone up 100%, 200%, and even 300% (flying past NVIDIA, one of the top A.I stocks of 2023). And it just isolated another company. It’s an under-the-radar stock that already has a lucrative partnership with Microsoft - but has far more potential in the days ahead. To get its name and ticker symbol for free. [Click here to know more]([Ad] Our Opinion 9/10 We’re still big fans of the house of mouse and see a lot more room for the stock to climb. Iger’s instituted an effective turnaround on a massive company. His leadership is crucial to the company’s success. While the stock may need a breather, we feel it could easily gain another 50% over the next tear or two. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3ENotice%3C%2Fb%3E%3A++Undefined+property%3A+stdClass%3A%3A%24previewText+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E102%3C%2Fb%3E%3Cbr+%2F%3E%0Ahttps%3A%2F%2Finvestingchannel.com%2F%3Fp%3D605731?utm_medium=ic-nl&utm_source=116003 ) News & Insights Just Spilled - [Financial Pros Flock to Hot New Bitcoin ETFs]( - [Adding Color to the Investment Spectrum]( - [Housing: It’s A Bad News, Bad News Situation]( - [Is Apple Still a Good Bet?]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= %3Cbr+%2F%3E%0A%3Cb%3ENotice%3C%2Fb%3E%3A++Undefined+property%3A+stdClass%3A%3A%24previewText+in+%3Cb%3E%2Fvar%2Fwww%2Fhtml%2Fnl_forms%2Fsrc%2FICTheSpill%2Fautomate-ic-article.php%3C%2Fb%3E+on+line+%3Cb%3E102%3C%2Fb%3E%3Cbr+%2F%3E%0Ahttps%3A%2F%2Finvestingchannel.com%2F%3Fp%3D605731?utm_medium=ic-nl&utm_source=116003 ) [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 ©2024 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](