February 28, 2016
NYSE: DIS
DISNEY (WALT) CO
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
$1.42
B-
C+
C
Annual Dividend Yield
1.48%
SELL
C-
D+
D
Beta
1.44
Sector: Consumer Goods & Svcs
Weekly Price: (US$)
DIS BUSINESS DESCRIPTION
The Walt Disney Company, together with its
subsidiaries, operates as an entertainment
company worldwide.
D-
E+
E
E-
F
Market Capitalization
$156.1 Billion
BUY
52-Week Range
$86.25-$122.08
Sub-Industry: Movies & Entertainment
SMA (50)
RATING SINCE
TARGET PRICE
05/04/2010
$125.54
Price as of 2/25/2016
$95.65
Source: S&P
SMA (100)
1 Year
2 Years
130
TARGET
TARGET
TARGETPRICE
PRICE
PRICE$125.54
$125.54
$125.54
TARGET
120
110
STOCK PERFORMANCE (%)
3 Mo.
Price Change
-19.40
1 Yr.
-9.40
3 Yr (Ann)
21.30
12 Mo.
8.86
15.77
19.37
3 Yr CAGR
8.23
17.48
20.15
100
GROWTH (%)
90
Last Qtr
13.83
31.98
36.22
Revenues
Net Income
EPS
80
70
Rating History
RETURN ON EQUITY (%)
BUY
DIS
20.65
17.75
14.87
Q1 2016
Q1 2015
Q1 2014
Ind Avg
15.36
13.15
11.10
S&P 500
12.28
14.59
13.97
Volume in Millions
100
2014
P/E COMPARISON
200
2015
0
2016
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
RECOMMENDATION
We rate DISNEY (WALT) CO (DIS) a BUY. This is based on the convergence of positive investment measures,
which should help this stock outperform the majority of stocks that we rate. The company's strengths can be
seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth,
compelling growth in net income, notable return on equity and expanding profit margins. We feel its
strengths outweigh the fact that the company has had lackluster performance in the stock itself.
17.85
25.35
21.53
DIS
Ind Avg
S&P 500
EPS ANALYSIS¹ ($)
HIGHLIGHTS
DIS's revenue growth has slightly outpaced the industry average of 7.9%. Since the same quarter one year
prior, revenues rose by 13.8%. Growth in the company's revenue appears to have helped boost the earnings
per share.
2014
2015
Q1 1.73
Q4 0.95
Q3 1.45
Q2 1.23
Q1 1.27
Q4 0.86
Q3 1.28
Q2 1.08
Q1 1.03
DISNEY (WALT) CO has improved earnings per share by 36.2% in the most recent quarter compared to the
same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth
over the past two years. We feel that this trend should continue. During the past fiscal year, DISNEY (WALT)
CO increased its bottom line by earning $4.90 versus $4.25 in the prior year. This year, the market expects an
improvement in earnings ($5.85 versus $4.90).
2016
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500
and the Media industry. The net income increased by 32.0% when compared to the same quarter one year
prior, rising from $2,182.00 million to $2,880.00 million.
The return on equity has improved slightly when compared to the same quarter one year prior. This can be
construed as a modest strength in the organization. Compared to other companies in the Media industry and
the overall market, DISNEY (WALT) CO's return on equity exceeds that of both the industry average and the
S&P 500.
43.43% is the gross profit margin for DISNEY (WALT) CO which we consider to be strong. It has increased
from the same quarter the previous year. Along with this, the net profit margin of 18.89% is above that of the
industry average.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 1
February 28, 2016
NYSE: DIS
DISNEY (WALT) CO
Sector: Consumer Goods & Svcs Movies & Entertainment Source: S&P
Annual Dividend Rate
$1.42
Annual Dividend Yield
1.48%
PEER GROUP ANALYSIS
25%
IMAX
V
FA
AB
OR
LE
TWX
VIA VIAB
R
VO
FA
LGF
LE
AB
-20%
DIS
CNK
UN
Revenue Growth (TTM)
LYV
FOXA FOX
-5%
Market Capitalization
$156.1 Billion
52-Week Range
$86.25-$122.08
Price as of 2/25/2016
$95.65
INDUSTRY ANALYSIS
The $1 trillion global Media industry includes advertising, cable, film, newspapers, radio, and television. The
Media business is dominated by household-name corporations such as Walt Disney (DIS), New York Times
(NYT), and Time-Warner (TWX). However, several smaller, but rapidly growing players include Comcast
(CMCSA), DirecTV (DTV), and DISH Network (DISH). The industry is reliant on the economy and is one of the
first sectors to thrive in a recovery and decline during a recession.
REVENUE GROWTH AND EBITDA MARGIN*
RGC
Beta
1.44
35%
Media companies naturally prosper during election years, thanks to substantial increases in advertising
revenues -- the key metric of growth. This positive cyclical factor -- which is highlighted by an estimated $2
billion increase in both political and Olympic-related advertising -- is why overall growth forecasts for
advertising continue to be positive.
Those threats include potential legislation and court rulings on media merger concentrations within
geographical regions, spliting up the royalty pie of DVD distribution fees with screenwriters, competing with
cheaper cable advertising rates, and the rising popularity of “zipping” -- fast-forwarding through commercials
by Digital Video Recorder (DVR) owners. Court fights and potential “net neutrality” legislation may pick
winners and losers. Federal court rulings against the Federal Communications Commission (FCC) risk allowing
broadband internet providers like Comcast charging higher prices to content providers and other websites to
remain being received at top speed stifling new small business growth.
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $2 Billion and $156.1 Billion.
Companies with NA or NM values do not appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
Newspaper companies are desperate to see a rebound in corporate and classified advertising. However, the
revenue streams from classified ads are being supplanted by internet ads and newspapers are attempting to
sell online subscriptions to bolster declining print circulations.
As for the film business, Hollywood continues to live or die based on the latest blockbuster releases.
In a bullish trend, products, such as Apple’s iPad and Google’s Nexus, are giving consumers more ways to
consume media.
REVENUE GROWTH AND EARNINGS YIELD
25%
PEER GROUP: Media
IMAX
V
FA
AB
OR
LE
DIS
RGC
LE
AB
-20%
R
VO
FA
-4%
TWX
VIA
UN
Revenue Growth (TTM)
LYV
CNK
VIAB
LGF
FOXA FOX
14%
Earnings Yield (TTM)
Ticker
DIS
TWX
FOX
FOXA
LYV
CNK
LGF
RGC
IMAX
VIAB
VIA
Recent
Company Name
Price ($)
DISNEY (WALT) CO
95.65
TIME WARNER INC
66.66
TWENTY-FIRST CENTURY FOX INC 27.38
TWENTY-FIRST CENTURY FOX INC 27.38
LIVE NATION ENTERTAINMENT
20.70
CINEMARK HOLDINGS INC
31.52
LIONS GATE ENTERTAINMENT CP 20.27
REGAL ENTERTAINMENT GROUP 19.43
IMAX CORP
28.50
VIACOM INC
37.11
VIACOM INC
41.29
Market
Cap ($M)
156,060
52,995
52,514
52,514
4,189
3,654
3,040
2,580
1,986
14,898
14,898
Price/
Earnings
17.85
14.55
22.63
22.63
NM
17.61
53.34
19.83
37.50
7.93
8.82
Net Sales
TTM ($M)
54,318.00
28,118.00
26,497.00
26,497.00
7,080.86
2,805.33
2,202.30
3,127.30
356.93
13,078.00
13,078.00
Net Income
TTM ($M)
9,080.00
3,833.00
2,409.00
2,409.00
-159.70
206.43
58.89
153.40
54.34
1,871.00
1,871.00
The peer group comparison is based on Major Movies & Entertainment companies of comparable size.
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -18.7% and
21.8%. Companies with NA or NM values do not
appear.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 2
February 28, 2016
NYSE: DIS
DISNEY (WALT) CO
Sector: Consumer Goods & Svcs Movies & Entertainment Source: S&P
Annual Dividend Rate
$1.42
Annual Dividend Yield
1.48%
COMPANY DESCRIPTION
The Walt Disney Company, together with its
subsidiaries, operates as an entertainment company
worldwide. The company operates broadcast and cable
television networks, domestic television stations, and
radio networks and stations; and is involved in the
television production and television distribution
operations. Its cable networks include ESPN, Disney
Channels, and ABC Family, as well as UTV/Bindass and
Hungama. The company owns eight domestic television
stations. It also owns and operates the Walt Disney
World Resort in Florida that includes theme parks;
hotels; vacation club properties; a retail, dining, and
entertainment complex; a sports complex; conference
centers; campgrounds; golf courses; water parks; and
other recreational facilities. In addition, the company
operates Disneyland Resort in California; Disney Resort
& Spa in Hawaii; Disney Vacation Club, Disney Cruise
Line, and Adventures by Disney; and Disneyland Paris,
Hong Kong Disneyland Resort, and Shanghai Disney
Resort, as well as licenses its intellectual property to a
third party for the operations of the Tokyo Disney Resort
in Japan. Further, it produces and acquires live-action
and animated motion pictures, direct-to-video content,
musical recordings, and live stage plays; licenses trade
names, characters, and visual and literary properties to
retailers and publishers; publishes entertainment and
educational books, magazines, and comic books; and
operates English language learning centers in China.
Additionally, the company is involved in the sale of
merchandise through its retail stores, Internet shopping
sites, and wholesale business. In addition, it creates and
distributes entertainment and lifestyle content for
interactive media platforms. The company was founded
in 1923 and is based in Burbank, California.
DISNEY (WALT) CO
500 South Buena Vista Street
Burbank, CA 91521
USA
Phone: 818-560-1000
http://www.thewaltdisneycompany.com
Beta
1.44
Market Capitalization
$156.1 Billion
52-Week Range
$86.25-$122.08
Price as of 2/25/2016
$95.65
STOCK-AT-A-GLANCE
Below is a summary of the major fundamental and technical factors we consider when determining our
overall recommendation of DIS shares. It is provided in order to give you a deeper understanding of our rating
methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
valuation. Please refer to our Valuation section on page 5 for further information.
FACTOR
SCORE
5.0
Growth
out of 5 stars
weak
Measures the growth of both the company's income statement and
cash flow. On this factor, DIS has a growth score better than 90% of the
stocks we rate.
strong
4.5
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 80% of the companies we
cover.
strong
5.0
Efficiency
out of 5 stars
weak
Measures the strength and historic growth of a company's return on
invested capital. The company has generated more income per dollar of
capital than 90% of the companies we review.
strong
4.5
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 80% of the stocks we monitor.
strong
5.0
Solvency
out of 5 stars
weak
Measures the solvency of the company based on several ratios. The
company is more solvent than 90% of the companies we analyze.
strong
3.5
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. The company's
dividend is higher than 60% of the companies we track.
strong
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 3
February 28, 2016
NYSE: DIS
DISNEY (WALT) CO
Sector: Consumer Goods & Svcs Movies & Entertainment Source: S&P
Annual Dividend Rate
$1.42
Annual Dividend Yield
1.48%
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
1.40
5.85 E
6.23 E
Q2 FY16
2016(E)
2017(E)
Beta
1.44
Market Capitalization
$156.1 Billion
52-Week Range
$86.25-$122.08
Price as of 2/25/2016
$95.65
FINANCIAL ANALYSIS
DISNEY (WALT) CO's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged
when compared to the same period a year ago. The company managed to grow both sales and net income at
a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year
ago. DISNEY (WALT) CO has weak liquidity. Currently, the Quick Ratio is 0.78 which shows a lack of ability to
cover short-term cash needs. The company's liquidity has decreased from the same period last year.
During the same period, stockholders' equity ("net worth") has remained unchanged from the same quarter
last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial
difficulties could develop in the future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q1 FY16
15,244.00
4,596.00
3,989.00
2,880.00
Q1 FY15
13,391.00
3,800.00
3,208.00
2,182.00
Q1 FY16
4,301.00
90,121.00
18,915.00
43,958.00
Q1 FY15
5,077.00
87,035.00
16,543.00
44,165.00
Q1 FY16
43.43%
30.14%
26.17%
0.60
10.07%
20.65%
Q1 FY15
42.83%
28.37%
23.96%
0.57
9.01%
17.75%
Q1 FY16
0.95
0.30
66.00
60.44
Q1 FY15
1.03
0.27
69.00
46.49
Q1 FY16
1,700
0.71
1.73
25.86
NA
11,148,012
Q1 FY15
1,700
1.15
1.27
25.98
NA
8,508,211
BALANCE SHEET
Cash & Equiv. ($mil)
Total Assets ($mil)
Total Debt ($mil)
Equity ($mil)
PROFITABILITY
Gross Profit Margin
EBITDA Margin
Operating Margin
Sales Turnover
Return on Assets
Return on Equity
DEBT
Current Ratio
Debt/Capital
Interest Expense
Interest Coverage
SHARE DATA
Shares outstanding (mil)
Div / share
EPS
Book value / share
Institutional Own %
Avg Daily Volume
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 4
February 28, 2016
NYSE: DIS
DISNEY (WALT) CO
Sector: Consumer Goods & Svcs Movies & Entertainment Source: S&P
Annual Dividend Rate
$1.42
Annual Dividend Yield
1.48%
Beta
1.44
Market Capitalization
$156.1 Billion
52-Week Range
$86.25-$122.08
Price as of 2/25/2016
$95.65
VALUATION
BUY. This stock's P/E ratio indicates a discount compared to an average of 25.35 for the Media industry and a
discount compared to the S&P 500 average of 21.53. For additional comparison, its price-to-book ratio of 3.70
indicates a premium versus the S&P 500 average of 2.56 and a premium versus the industry average of 3.51.
The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating
a premium.
2 Year Chart
$125
Price/Earnings
$100
DIS 17.85
Peers 25.35
• Discount. A lower P/E ratio than its peers can
signify a less expensive stock or lower growth
expectations.
• DIS is trading at a significant discount to its peers.
BUY: $80.21
RATINGS HISTORY
Our rating for DISNEY (WALT) CO has not changed
since 5/4/2010. As of 2/25/2016, the stock was
trading at a price of $95.65 which is 21.7% below its
52-week high of $122.08 and 10.9% above its
52-week low of $86.25.
2014
2015
1
2
3
premium
Price/Projected Earnings
1
2
From
Buy
To
Buy
Price reflects the closing price as of the date listed, if available
5
3
4
5
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
Price/Book
(as of 2/25/2016)
DIS 3.70
Peers 3.51
• Average. A lower price-to-book ratio makes a stock
more attractive to investors seeking stocks with
lower market values per dollar of equity on the
balance sheet.
• DIS is trading at a valuation on par with its peers.
32.19% Buy - We believe that this stock has the
opportunity to appreciate and produce a total return of
more than 10% over the next 12 months.
35.29% Hold - We do not believe this stock offers
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss.
32.52% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with
the risk involved too great to compensate for any
possible returns.
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
2
3
premium
Price/Sales
1
2
premium
4
5
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
DIS 0.93
Peers 1.11
• Discount. The PEG ratio is the stock’s P/E divided
by the consensus estimate of long-term earnings
growth. Faster growth can justify higher price
multiples.
• DIS trades at a discount to its peers.
Earnings Growth
1
2
3
4
lower
5
higher
DIS 19.37
Peers -47.28
• Higher. Elevated earnings growth rates can lead to
capital appreciation and justify higher
price-to-earnings ratios.
• DIS is expected to have an earnings growth rate
that significantly exceeds its peers.
Sales Growth
discount
DIS 2.99
Peers 2.70
• Premium. In the absence of P/E and P/B multiples,
the price-to-sales ratio can display the value
investors are placing on each dollar of sales.
• DIS is trading at a premium to its industry on this
measurement.
3
DIS 14.24
Peers 14.16
• Average. The P/CF ratio, a stock’s price divided by
the company's cash flow from operations, is useful
for comparing companies with different capital
requirements or financing structures.
• DIS is trading at a valuation on par to its peers.
discount
3
2
premium
discount
DIS 15.35
Peers 20.73
• Discount. A lower price-to-projected earnings ratio
than its peers can signify a less expensive stock or
lower future growth expectations.
• DIS is trading at a discount to its peers.
1
1
Price/CashFlow
discount
premium
MOST RECENT RATINGS CHANGES
Date
Price
Action
2/25/14
$80.21 No Change
4
1
2
3
lower
4
5
higher
DIS 8.86
Peers 9.71
• Average. Comparing a company's sales growth to
its industry helps to determine if the company is
adding or losing market share.
• DIS is keeping pace with its peers on the basis of
sales growth.
DISCLAIMER:
The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but
TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided
via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as
other third-party data providers.
TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or
other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a
qualified securities professional, before you make any investment. None of the information contained in this report constitutes,
or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a
determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the
investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at
http://www.thestreet.com/static/about/terms-of-use.html.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 5