Morgan Stanley analyst Benjamin Swinburne reiterated an Overweight rating on Walt Disney Co (NYSE: DIS) with a price target of $105.
Disney announced plans to increase investment in the Disney Parks, Experiences, and Products ("DPEP") segment.
At the same time, its recent Charter Communications, Inc (NASDAQ: CHTR) agreement clarifies the path ahead for ESPN while strategic options are being explored for linear assets.
The analyst sees the Parks & Experiences businesses (75% of FY23 segment operating income) as uniquely attractive in long-term growth potential, scale, and returns, warranting a low double-digit EBITDA multiple.
By implication, at current DIS share prices, Disney's media assets in aggregate are valued at roughly $50 billion, less than 1x sales, or 30% of Netflix Inc's (NASDAQ: NFLX) current enterprise value.
At more than $55 billion in revenue and growing, the current ~6% DMED EBITDA margin has a significant opportunity to expand over time.
The analyst expects Disney to move aggressively to optimize content monetization in ...