Stock Analysis: Disney (DIS)

Act like a stock analyst to provide rationales about why investors should hold this stock. Summarize three key aspects of why you pick up this stock. For example, you can talk about a company’s unique strategies, business model, new product development, customer satisfaction, etc. that you believe it would drive up the stock price. The data should include P/E ratio, EPS, ROA, and ROE would be helpful for people to understand the stock better.

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Stock Analysis

Stock Analysis: Disney (DIS)

The PE ratio is an essential measure in assessing the value of a stock. An important aspect of the PE ratio is that it reveals whether the stock is undervalued or overvalued while comparing its valuation to its industry range. The Walt Disney Co (DIS) PE ratio is at 36.59 as of March 31^th 2021. Over the past five years, the stock’s minimum PE ratio was 12.00, the average was 18.18, and the maximum PE ratio was 43.00 (macrotrends, 2021). Thus, the current PE ratio is higher than the average over the five-year period. In this case, investors should expect higher future earnings.

As a diverse international entertainment company, Disney covers a wide range of customers. Currently, the stock has 2.04 earnings per share (EPS), -2.42% return on assets (ROA), and a -5.47% return on equity (ROE) (Yahoofinance, 2021). Similar to other companies all over the world, Disney was affected by the Covid-19 pandemic. However, the company continues to recover from the crisis and currently has more than 146 million paid subscriptions across its three streaming services. As the economy reopens, Disney (DIS) will experience a rapid demand in its theme parks (Forbes, 2021). In addition, the company’s strategy to create more than 100 new titles per year will impact its sales over the course, leading to an increase in demand for DIS stocks.

Disney has a competitive advantage due to its strong marketing skills that will attract many subscribers, leading to increased revenues in the future. Thus, holding the stocks will guarantee good returns for investors. Despite the pandemic, the company surpassed the predicted revenue from its parks. While the pandemic may continue to impact sales across the globe, the company plans to leverage the stay-at-home guidelines to maximize revenues from its streaming services.

References

Forbes, (2021). Walt Disney (DIS). https://www.forbes.com/companies/walt-disney/?sh=269e5e6a5730

macrotrends, (2021). Disney ROE 2006-2020 | DIS. https://www.macrotrends.net/stocks/charts/DIS/disney/roe

Yahoo finance, (2021). The Walt Disney Company (DIS). https://finance.yahoo.com/quote/DIS/analysis/

YCHARTS, (2021). Walt Disney PE Ratio. https://ycharts.com/companies/DIS/pe_ratio