Walt Disney Co. (NYSE:DIS) is amid a restructuring exercise as it faces fundamental challenges and there are rumors adrift that the company might offload its ESPN cable sports channel.
An analyst at KeyBanc Capital Markets weighed in on the value ESPN has for Disney.
Muted Expectations: ESPN is a “melting iceberg,” said KeyBanc Capital Markets analyst Brandon Nispel. Its valuation could be currently at $30 billion, assuming nine times the valuation multiple of the estimated EBITDA estimate for 2024. The fair value range is at $28 billion to $36 billion, he said.
The analyst estimates ESPN's revenue to be $16 billion, and expects it to have a low-single-digit revenue growth profile. Much of the growth will likely come from the direct-to-consumer business as linear revenues are tracing a downward trajectory, he said.
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