Disney: Unmatched entertainment in every medium

WendyDelia
2022-10-30

Disney has demonstrated a sustained recovery from the earlier stages of the pandemic, when its streaming services were the silver lining in a dark cloud of theme park closures and social distancing moves that sapped many of its other revenue streams. Now, it'swell-positioned as a leaderin all areas of entertainment, from its parks and products to its films, television networks, and streaming services.

n Disney's fiscal third quarter, which ended July 2, revenue increased 26% year over year and surpassed the top line from Q3 2019. That growth was fueled by park reopenings, people returning to theaters, and an increase in streaming subscriptions that temporarily allowed it to displace $Netflix(NFLX)$ as the global streaming leader.

It's no surprise that Disney has come back big. It has an unparalleled creative team steering its content and the most highly developed theme park collection in the world. And it's also back to increasing its profitability.

Yet Disney stock is down by 40% over the past year. It is trading at 58 times trailing 12-month earnings -- a fairly expensive level for Disney -- but that ratio will decline as the company posts higher earnings. It will also come down if the stock price falls further, which would be a great opportunity to grab shares.

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