Latest news with #DIS
Business Insider
2 days ago
- Business
- Business Insider
'Freebies, Discounts and Sweepstakes' Help Keep Disney+ Subscribers; Disney Stock (NYSE:DIS) Notches Up
So things have been looking reasonably good for entertainment giant Disney (DIS) recently. It has the top movie in the United States right now with the live-action remake of Lilo & Stitch. The stink of Snow White 's failure is finally departing. And now, Disney rolled out a set of new 'perks' designed to keep Disney+ subscribers from becoming churn statistics or streaming nomads. That gave investors reason to cheer as well, and shares notched up fractionally in the closing minutes of Friday's trading. Confident Investing Starts Here: Disney knows that there are a lot of options out there when it comes to streaming, and this growing diffusion is actually starting to hurt the entire streaming concept. So rather than take its chances with an audience that gets bored easily and goes off in search of new content elsewhere once the old content has run out, Disney is offering up new 'perks,' as some put it, to keep Disney viewers in the fold. The United States gets first go with the Disney Plus Perks program, including discounts for merchandise from places like Funko (FNKO), a six-month DashPass membership with DoorDash (DASH), and more. And, next week, Hulu will have its own loyalty program scheme in place that includes a range of companies offering discounts, and new perks stepping in over the course of the summer. Disney Adults Disappointed by Budget Airlines Meanwhile, the so-called Disney adult is apparently getting fed up with budget airlines, and is potentially posing a problem for Disney itself. While just getting to a Disney park can be a challenge, depending on where you live, the budget airlines that represented a great way to save cash while traveling are letting down their passengers. The problem seems to be that the budget airlines are having trouble keeping up with their larger counterparts, who are reducing fares to try and take advantage of what passenger base there is left. Many of those airlines are also upgrading their planes to take advantage of the wealthy passenger, but planes need to be filled, and thus, cheaper fares are often a go-to. Thus, the Disney adult is paying about what they would pay elsewhere for service that truly is 'budget.' Is Disney Stock a Buy or Hold? Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 14 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 7.8% rally in its share price over the past year, the average DIS price target of $123.56 per share implies 9.27% upside potential.
Yahoo
3 days ago
- Business
- Yahoo
Disney Just Dropped the Ultimate Streaming Perk Bomb--And It's Not What You Think
Walt Disney Co. (NYSE:DIS) is rolling out a new wave of subscriber perks across its streaming platformsand it's not just about a better deal, it's about locking you in. Starting this week, Disney+ users logging in via the website can snag everything from $10 credits and collectible pins to discounts on theme parks and in-game bonuses. There are even sweepstakes for Disney cruises and premiere access to films like Freakier Friday. Hulu's getting in on the action tooits perks program kicks off June 2 with chances to win tickets to Jimmy Kimmel Live!, Comic-Con, and Lollapalooza. If you subscribe to both, you'll get access to both programs. Warning! GuruFocus has detected 7 Warning Sign with DIS. This move isn't about adding new users at all costs anymore. Disney has been pivoting toward profitabilityand with 126 million Disney+ subscribers and 54.7 million on Hulu, the focus has shifted to keeping them around. The streaming division delivered $629 million in operating income in the first half of fiscal 2025, and that's the real win. The idea: the longer you stay, the more valuable you becomeespecially to advertisers. And with churn at just 3% in April, well below the industry average, the early signs are encouraging. Disney's betting that perksnot just contentcould be the next moat in streaming. Executives say the new offers are a thank-you to fans, but this is also a calculated strategy to drive stickiness and reduce subscriber fatigue. Perks will hit the U.S. first, with international rollouts later this year. Whether it's a cruise, a collectible pin, or just not having to re-enter your login for the fifth time this week, Disney wants to give you one less reason to cancel. This article first appeared on GuruFocus.
Globe and Mail
3 days ago
- Business
- Globe and Mail
Is Disney Stock a Buy After Record Box Office Weekend? Jim Cramer Thinks So.
Jim Cramer, famed television personality and host of the popular CNBC show 'Mad Money,' has come out in favor of Disney (DIS). Cramer believes the entertainment giant, after a rough patch, is poised for a rebound thanks to the unexpected success of Lilo & Stitch, the live-action remake of the beloved 2002 animated classic. The movie made a spectacular Memorial Day weekend with a $183 million domestic box-office haul, and Disney reported on May 27 that it had earned $361.3 million worldwide to date, leading to Disney becoming the first studio to crossed $2 billion in collections at the global box office in 2025. However, amid all the excitement, DIS stock is still flat on a YTD basis, with a market cap of $200.5 billion. So, is Cramer's optimism around the 'House of the Mouse' justified or should investors make a beeline for the stock? Let's find out. Disney Posts Solid Q2 Results Since CEO Bob Iger's return to the helm, Disney's operations have stabilized, with revenue and earnings experiencing compound annual growth rates (CAGRs) of 7.1% and 43.8%, respectively. The strong showing continued in the most recent quarter as well with Disney reporting a beat on both revenue and earnings. Revenue grew by 6.8% from the previous year to $23.6 billion, and the company moved into profitability in Q2 2025 with EPS of $1.81 compared to a loss of $0.01 per share in the year-ago period. All the key revenue segments of the company clocked growth, with the Entertainment, Sports, and Experiences segments growing by 9%, 5% and 6% on a year-over-year basis to $10.7 billion, $4.5 billion and $8.9 billion, respectively. Moreover, Disney+ saw its total paid subscribers rise to 126 million from 124.6 million in the prior year with an improvement in monthly revenue per paid subscriber to $7.77 from $7.55 in the same period. Disney's cash flow from operations for the quarter stood at $9.9 billion (vs $5.8 billion in Q2 2024), with free cash flow rising to $5.6 billion from $3.3 billion in the prior year. Analysts project forward revenue and earnings growth rates of 3.99% and 61.75% for Disney, which are ahead of the sector medians of 3.18% and 11.13%, respectively. Core Drivers The primary reason Disney has become a focus of investor enthusiasm is its ambitious blueprint to expand across physical entertainment destinations and interactive digital experiences. A major component of this strategy is the company's decision to establish its next flagship theme park on Yas Island in Abu Dhabi. This forthcoming resort will become Disney's seventh such complex and, according to Josh D'Amaro, who leads Disney Experiences, it is poised to be the most advanced and interactive project the company has ever developed. While no opening date has been disclosed, the announcement alone marks a significant step in Disney's global growth efforts. Alongside international expansion, substantial updates are also planned for Disney's domestic parks. In Anaheim, the Avengers-themed zone will see considerable growth, while a new Avatar-based experience is set to be introduced at California Adventure. In Florida, Magic Kingdom will unveil an entire area focused on classic Disney villains, and Animal Kingdom will debut a new Indiana Jones narrative. Additions are also coming to other corners of the Walt Disney World Resort, including a Monsters, Inc.-inspired space at Hollywood Studios and a new extension in Frontierland featuring characters and themes from the Cars franchise. Simultaneously, Disney is investing heavily in gaming and digital realms. Through a $1.5 billion equity stake in Epic Games, the company has laid the groundwork for an entirely new entertainment universe inspired by Fortnite. This initiative will incorporate beloved Disney franchises such as Star Wars and Marvel, with Epic's Unreal Engine serving as the backbone for game development and immersive storytelling. Beyond content creation, the company is actively restructuring its streaming and media business to drive efficiency and monetization. One major move involves integrating its three streaming services — Disney+, Hulu, and ESPN+ — into a singular platform that emphasizes user customization and value-oriented bundling. Disney also intends to bring ESPN directly to consumers via a new standalone product in the coming months. In parallel, the company is finalizing a transaction that will see Hulu + Live TV combine with fuboTV in a multibillion-dollar deal, resulting in Disney holding a 70% stake in the newly merged streaming service. Taken together, these moves reflect a broader strategic vision — one that merges Disney's strengths in storytelling, technology, and global brand loyalty. With physical expansion complementing innovation in digital engagement and content distribution, Disney is setting the stage not only for continued financial growth but for deeper consumer interaction with its franchises. For shareholders, the convergence of theme park development, gaming ventures, and streaming integration paints a compelling picture of a company aligning its core assets to meet evolving consumer demands and unlock long-term value. Analyst Opinions on DIS Stock Overall, analysts have attributed a rating of 'Strong Buy' for Disney stock with a mean target price of $125.73, which denotes an upside potential of about 12% from current levels. Out of 29 analysts covering the stock, 21 have a 'Strong Buy' rating, two have a 'Moderate Buy' rating, and six have a 'Hold' rating.
Globe and Mail
4 days ago
- Business
- Globe and Mail
Disney Hits Box Office Highs with Lilo & Stitch - Is DIS Stock a Buy Now?
The Walt Disney Company's (DIS) hit movie ' Lilo & Stitch ' made box office highs on Memorial Day weekend. So, is DIS stock a buy here? Yes - a quick look at its strong free cash flow profile and revenue forecasts shows it could be 24% or so undervalued, worth over $139 per share. DIS is at $112.54 in midday trading on Tuesday, May 27. That is well up from recent lows but only slightly lower than 6-month highs. On May 26, Rotten Tomatoes reported that Lilo & Stitch ' Roars to Highest Memorial Day Weekend Ever.' It is estimated to have grossed $183 million for the long weekend, beating out Paramount's 'Mission: Impossible' film. That implies Disney's cash flow strength seen last quarter could continue this quarter and the fiscal year ending Sept. 2025. This article will look at this. Free Cash Flow Estimates On May 7, Disney reported that its fiscal Q2 ended March 29, revenue was up 7% YoY, and it generated 15% higher operating income. More importantly, its free cash flow (FCF) and FCF margins (i.e., FCF/revenue) surged, as seen in the table below (taken from page 3 of its quarterly earnings release). This shows that FCF was up over double in the quarter, and its FCF margins almost doubled to 20.7%. Moreover, for the past 6 months, it converted 11.65% of revenue into free cash flow. We can use that to estimate its FCF going forward. For example, analysts now expect revenue for this FY ending Sept. 30, 2025, will rise by 2.8% from $92.5 billion last year to $95.11 billion. In addition, forecasts for the next fiscal year are for +5.1% higher revenue of $99.98 billion (almost $100 billion). If it keeps generating hits like Lilo & Stitch, that could happen. That implies that Disney will be on a next 12-month (NTM) run rate revenue of about $97.5 billion. So, if the company can keep generating an FCF margin between 12% and 20% (average of 16%) over that period, here is the FCF forecast: $97.5 billion x 16% FCF margin = $15.6 billion FCF As a result, DIS stock could be worth significantly more. Let's estimate its price target. Target Price for DIS Stock For example, using a 5.0% FCF yield metric (i.e., which assumes that 100% of FCF is paid out to shareholders and the market gives the stock a 5% dividend yield), DIS stock is worth much more than its price today. Let's see how that works. This means that we take the FCF estimate and divide it by 5% (which is the same as multiplying by the reciprocal, or 20x): $15.6 b FCF x 20 = $312 billion market cap That is 54% higher than today's market cap of $202 billion. In other words, DIS stock is worth 54% more or $112.54 x 1.54 = $173 per share However, just to be conservative, let's scale back our parameters. Let's assume that FCF margins stay low at 12.5% and the company generates lower FCF: 0.125 x $97.5 billion NTM revenue = $12.19 billion FCF Next, using a lower FCF multiple of just 18.2 times (i.e., a FCF yield of 5.50%): $12.19b FCF x 18.2 = $221.9 billion mkt cap That is just 10% higher than today's $202 billion market valuation. It means the target price would be $123.79 per share. Expected Return. So, on average, that implies that Disney's valuation could range between $222 billion and $312 billion, or $124 to $173 p/sh (i.e., an average of $148.50). However, the expected return might be lower if we weight the lower target price higher. For example, let's say there is a 2/3rds likelihood DIS stock is worth $123 vs. a 1/3rd chance it's worth $173: $123 x 0.667 = $82.04 + $173 x 0.333 = $57.61 = Target Price = $139.65 Expected Return = $139.65 / $112.54 -1 = 1.24 -1 = +24% Summary So, assuming Disney generates FCF margins this year and next of between 12% and 20% and weighting that possibility heavier on the lower side, an investor can expect around a 24% return investing in DIS stock today at over $139 per share Analysts tend to agree with this target price. For example, Yahoo! Finance reports that 31 analysts have an average price of $123.90. Similarly, Barchart's mean survey is for 125.73. which tracks recent analyst recommendations, shows that the average of 27 analysts is $129.41 per share. That is +15% higher than today's price. The bottom line here is that DIS still looks undervalued, using a FCF and FCF margin analysis, a FCY yield valuation metric, expected return analysis, and also analysts' price targets.
Yahoo
6 days ago
- Business
- Yahoo
Disney's 'Lilo & Stitch' Drives Record Memorial Day Weekend for Domestic Box Office
Walt Disney's (DIS) "Lilo & Stitch" live-action remake powered the US box office to a record high ov Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
