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Analysis of Walt Disney Company.

Analysis of Walt Disney Company.

17 August 2022

Disney: streaming will help to earn

The Disney company is perhaps the most famous symbol of the entertainment industry in the world. These are not only studios, but also theme parks, a streaming service, a TV channel, and shops. The company’s capitalization in 2022 is $253 billion.

The company’s data for the third fiscal quarter of 2022 turned out to be quite promising. The details are as follows:

  • total quarterly revenue +26% YoY to $21.5 billion, above the forecast of $21 billion;
  • revenue +28% YoY for 9 months to $62.6 billion;
  • quarterly profit in the Parks, Experiences & Product segment +70% YoY to $7.4 billion. Specifically, amusement parks have increased revenue twice as much as a year earlier;
  • quarterly revenue in the Media & Entertainment Distribution segment +11% YoY to $14.1 billion;
  • revenue from the streaming direction +19% to $5.1 billion.

Business strengths in the moment:

  • growth in the number of paid subscribers for the quarter +14.4 million to 152.1 million people (+31% YoY). At the same time, the cost of a monthly subscription has not changed ($6.29);
  • earnings per share of $1.09 – above the consensus forecast of $0.80.


  • an increase in the operating loss from streaming services due to the ever-increasing spending on content creation;
  • growth of capital expenditures, including the renovation of amusement parks;
  • negative free cash flow (-$317 million).

In fact, the visible risks do not seem critical or frightening. All expenses are incurred as part of a campaign to expand the subscriber and user base.

Against the background of Netflix streaming, the Disney+ strategy looks quite confident.

The consensus forecast for Disney securities is $145-150.

The daily trading schedule is quite favorable. The MACD indicator is growing in a positive zone and signals a purchase. The Stochastic oscillator develops growth in the positive area and confirms the buy signal.

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    ARAVANA Capital management
    17 August 2022
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