DCF Studio

    DIS · NYQ · Communication Services

    The Walt Disney Company

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 46.83

    Market price

    USD 102.67

    Implied upside

    -54.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 46.83-54.4%
    Exit multiple
    USD 78.30-23.7%
    Market price
    USD 102.67

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn5bn9bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 98.7bnUSD 103.1bnUSD 107.8bnUSD 112.6bnUSD 117.7bn+4.5%
    EBITUSD 11.3bnUSD 11.9bnUSD 12.4bnUSD 13.0bnUSD 13.5bn+4.5%
    NOPATUSD 9.0bnUSD 9.4bnUSD 9.8bnUSD 10.2bnUSD 10.7bn+4.5%
    Add depreciation & amortisationUSD 5.8bnUSD 6.0bnUSD 6.3bnUSD 6.6bnUSD 6.9bn+4.5%
    Less capital expenditureUSD -6.4bnUSD -6.7bnUSD -7.0bnUSD -7.3bnUSD -7.6bn+4.5%
    Less increase in working capitalUSD -597.6mUSD -624.5mUSD -652.7mUSD -682.1mUSD -712.9m+4.5%
    Free cashflow to firmUSD 7.7bnUSD 8.1bnUSD 8.4bnUSD 8.8bnUSD 9.2bn+4.5%
    Discount factor0.95180.86230.78130.70780.6413-
    Present valueUSD 7.4bnUSD 7.0bnUSD 6.6bnUSD 6.2bnUSD 5.9bn-5.3%
    Present Value Of The ForecastUSD 33.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.274Reported 1.409, pulled toward 1.0 (Blume)
    Cost of equity12.01%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 177.3bn79.8% of capital
    Total debtUSD 44.9bn20.2% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC10.38%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 46.83

    73% of EV

    Forecast FCFF, final year
    USD 9.2bn
    Capex at depreciation, working capital in reinvestment
    USD 14.4bn
    Less reinvestment at g/ROIC (24.1% of NOPAT)
    USD -3.5bn
    Capitalised
    USD 10.9bn
    ROIC (WACC floor)
    10.4%
    Terminal value, undiscounted
    USD 141.8bn
    Terminal value, discounted
    USD 90.9bn
    Enterprise value
    USD 124.0bn
    Less net debt
    USD 39.2bn
    Equity value
    USD 84.8bn

    Exit at 11.3x EBITDA

    Value per shareUSD 78.30

    82% of EV

    Terminal value, undiscounted
    USD 230.7bn
    Terminal value, discounted
    USD 147.9bn
    Enterprise value
    USD 181.0bn
    Less net debt
    USD 39.2bn
    Equity value
    USD 141.8bn

    Spread between methods: 50%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.38%64.3264.6564.9865.3165.64
    9.38%54.3554.6354.9255.2055.48
    10.38%46.3546.5946.8447.0847.33
    11.38%39.7840.0040.2140.4340.64
    12.38%34.3134.5034.6934.8835.07

    Outlined: this model. Green text: above today's price of 102.67. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year4.5%20.6%+16.0pp
    EBIT margin11.5%22.5%+11.0pp
    Discount rate10.4%6.0%-4.4pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.