In this article, we put The Walt Disney Company under the microscope through a complete analysis of the Walt Disney shares. We looked at the group's mission and ambitions, the details of its activities, and its financial performance. We also looked at the technical configuration of the Disney share price to best prepare for a possible investment. Find our analysis of The Walt Disney title below.
The Walt Disney Company: a global entertainment giant
Mission and ambitions of the company The Walt Disney Company
From its humble beginnings as a cartoon studio in the 1920s to its preeminent name in the entertainment industry today, The Walt Disney Company has established itself as a staple that has made its mark through its stories of many generations of families in the United States and around the world.
Today, The Walt Disney Company, together with its subsidiaries, is a leading diversified international media and family entertainment company. It includes Disney Parks, Experiences and Products, Disney Media & Entertainment Distribution, and four groups – Studios, General Entertainment, Sports, and International – which focus on content development and production.
The Walt Disney Company's mission is to entertain, inform and inspire people around the world through the power of strong storytelling, reflecting the iconic brands, creative minds, and innovative technologies at its disposal.
What is The Walt Disney Company's strategy?
The Walt Disney Company has a generic competitive advantage strategy that leverages the uniqueness of products offered in the entertainment, media, and amusement park industries.
In 2018, it began a strategic reorganization along these lines: the new structure consolidates the company's direct-to-consumer services, technology, and international media operations into one global business to take advantage of growth opportunities. Additionally, parks and resorts and consumer product sales have been combined to create a unique new location that blends Disney's history and characters.
“We are strategically positioning our business for the future, creating a more effective global framework to serve consumers around the world, increase growth and maximize shareholder value,” said Robert A. Iger, Chairman and Chief Executive Officer of The Walt Disney Company in reorganization.
Under this new structure, the new Direct-to-Consumer and International segment will include Disney's international media businesses and the company's global direct-to-consumer businesses, including the Disney+ streaming service. , the company's stake in Hulu and its streaming service ESPN+.
The new Parks, Experiences, and Consumer Products segment will become the center in which Disney stories, characters, and franchises come to life. Disney's worldwide consumer products business is merged with that of Walt Disney Parks and Resorts.
Strengths and Weaknesses of The Walt Disney Company
| Strengths & Opportunities | Weaknesses & Challenges |
|---|---|
| Its brand image inspires around the world | A group impacted by the various successive crises (COVID-19, Inflation) |
| Its DTC (Direct To Consumer) activity in particular its Disney+ platform | High dependence on North American income (80%) |
| Its interesting valuation levels on current levels |
Presentation of the activities of The Walt Disney Company
The Walt Disney Company concentrates its activities in the field of media and entertainment, here is how its turnover is distributed among the different activities.
Operation of television channels and radio stations (39.7% of sales)
The Walt Disney Company primarily owns ABC Television Network (8 U.S.-owned channels as of September 2020), ESPN Radio Network, Disney Channel, Freeform, FX, and National Geographic. The group also produces and distributes television programs, produces video games, and operates websites.
Production and distribution of films and video streaming (23.7% of sales)
The production and distribution of films and video streaming represent 23.7% of turnover, in particular its flagship product: Disney +. Disney+ is a subscription-based video streaming service with programs from Disney, Pixar, Marvel, Star Wars, and National Geographic.
The lineup included approximately 33,000 episodes and 1,850 films from the company-produced and acquired television and film library, as well as approximately 75 exclusive 2020 series and original films. Disney+ launched in November 2019 in the United States and in four other countries and was launched in other Western European countries in spring 2020.
Operation of animation studios and artistic production (13.5% of sales)
The Studios produces films under the Walt Disney Pictures, Twentieth Century Studios, Marvel, Lucasfilm, Pixar, and Searchlight Pictures brands. In fiscal 2022, the Studios plans to produce approximately 50 titles, which include episodic films and television programs, for theatrical distribution or on DTC platforms.
Operation of leisure facilities (23.1% of sales)
Disney operates different resorts around the world: seven in the United States (Walt Disney World Resort, Disneyland Resort, and Aulani, etc.), two in France (Disneyland Resort Paris), one in Japan (Tokyo Disneyland Resort), one in Hong Kong (Hong Kong Disneyland) and one also in China (Shanghai Disneyland).
The group is also involved in the sale of cruises (Disney Cruise Line), the organization of trips (Disney Vacation Club and Adventures By Disney), the design and development of parks and other real estate properties, and the sale of consumer products ( children's books, toys, game software, movies, etc.).
Breakdown of sales worldwide
Net sales break down geographically as follows: the United States and Canada (79.5%), Europe (11.2%), and Asia/Pacific (9.3%).
Fundamental analysis of The Walt Disney Company
Disney's first-half 2022 results
The Walt Disney Company reported a mixed second quarter of 2022, which admittedly well-exceeded analysts' revenue forecasts, but missed earnings estimates. The entertainment giant increased total revenue by 23.3% year-over-year to $19.2 billion and adjusted earnings per share (EPS) jumped 36.7% to $1.08.
The company's Disney Media and Entertainment Distribution segment, which accounts for 71% of its revenue in the second quarter, rose 9.5% to $13.6 billion. The Disney Parks, Experiences, and Merchandise category soared 110% to $6.7 billion, helped by diminished COVID-related concerns from a year earlier.
The company's operating margin increased 343 basis points to 19.2%, translating into an operating profit of $3.7 billion. Net income amounted to 1.57 billion dollars, up 72% compared to half of the previous year.
At a time when one of its main competitors, Netflix, is facing growing pains, The Walt Disney Company has continued to make progress on the streaming front. Now with more than 205 million subscribers split between Disney+, ESPN+, and Hulu, the company is poised to become the new king of streaming. In the second quarter, Disney+ subscribers grew 32.9% to 137.7 million, and CEO Bob Chapek said the company was still on track to hit 230-260 million subscribers. here in the fiscal year 2024.
Right now, in the context of the overall falling markets that we are experiencing, Disney stock is trading at 20x expected earnings in 2023. The entertainment company's valuation also looks very reasonable if earnings estimates per share are realized.
Technical analysis of The Walt Disney Company
Graphical analysis of the Walt Disney stock price
Disney stock technical analysis
Over the past 12 months, Disney shares have followed a downward trend identified by the oblique channel (in black on the graph), the lower limit of which has been tested several times over the past few months. Disney's share price is down 45%.
The medium-term trend for Disney stock is clearly bearish with the 20-day moving average (in green on the chart) below the 50-day moving average (in black on the chart), itself below the moving average at 100 days (in red on the graph).
In the short term, the trend for Disney stock is down with the MACD in negative territory, at its signal line. The stochastic RSI is in the neutral zone, so the stock is neither overbought nor oversold.
Our opinion on the Disney share
As a long-term investor, short-term headwinds from inflation, interest rates, and a possible recession have caused a large sell-off in Disney stock and appear to be providing investors with a starting point. interesting entry.
Overall, the Disney Company's performance in the second quarter was strong: its theme parks are recovering and its streaming services continue to grow at a rapid pace. Between its declining valuation, strong financial performance, and unparalleled brand recognition around the world, one can assume The Walt Disney Company will be a good stock to hold going forward.
Turbo Bourse Disney
To trade Disney shares, contact your stockbroker. For example, you can choose to use a derivative product such as Turbo call or Turbo put to take advantage of upward and downward fluctuations in Disney shares.
Disclaimer:
All of our information is, by nature, generic. They do not take into account your personal situation and do not in any way constitute personalized recommendations with a view to carrying out transactions and cannot be assimilated to a financial investment advisory service, nor to any incentive to buy or sell instruments.
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