DIS - Disney: 3 Reasons To Buy The Drop
2024-06-06 00:35:04 ET
Summary
- Disney's direct-to-consumer business is improving, with subscriber growth and increased average revenue per user for Disney+.
- The company's operating income in the direct-to-consumer segment has turned positive lately, reaching a major milestone.
- Disney's earnings outlook has been upgraded, with a 25% growth forecast and a target of $8 billion in free cash flow for this year.
- Shares are a bargain on the drop, trading for only 19X FY 2025 earnings.
The Walt Disney Company ( DIS ) has had major success in recent quarters in fundamentally improving the trajectory of its direct-to-consumer business, with the company achieving a milestone in Q1'24: it grew its DTC segment to operating profitability for the first time. The Streaming platform also announced that it was accelerating its capital returns including both a $3.0B stock buyback as well as an increased dividend which is set to make the stock more attractive for dividend investors going forward. I believe that Disney’s next catalyst will be the achievement of its very ambitious $7.5B cost savings target that the company laid out last year. The biggest reason for me to add to my position in Disney is that the streaming platform’s shares trade at a very attractive price-to-earnings ratio on the drop!...
Disney: 3 Reasons To Buy The Drop