2024-05-23 08:42:43 ET
Summary
- Disney stock sold off after the Q2 earnings reveal, but the punishment was overdone.
- The focus now is on cost-cutting and cash flow, as linear TV declines and box-office potential contracts.
- Disney's parks division offers flexibility and excellent ROI, and CEO Bob Iger is prioritizing capital allocation in that area.
- The company's overall strategy for streaming and other divisions will evolve... I offer my thoughts on this.
- The stock remains a long-term buy, even though valuation in some respects is expensive; therefore, buy preferably when the stock is under pressure.
I bought more Disney ( DIS ) on May 7, when it sold off post its Q2 earnings reveal. By the time this is published, the stock will be up and down, I'm sure, but I thought at the time that the market overdid the punishment for a slight earnings miss .
The story now is cost-cutting. Yes, all shareholders want revenue to grow, but with linear still declining and with the company stating it may have to release fewer films to compensate for contraction in box-office potential, the focus on cost-control and cash flow should be a welcome aspect of the story at this particular time (at other times, I will certainly alter my opinion when appropriate)....
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For further details see:
Disney: Still A Long-Term Idea, But Its Business Model Is Evolving