WALT DISNEY CO/ (DIS): what the price assumes

boothcheck covers WALT DISNEY CO/ (DIS) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-07-25.

Generated: 2026-08-31 · Source: https://boothcheck.com/report/DIS

Headline

FieldValue
TickerDIS
CompanyWALT DISNEY CO/
Sector / IndustryCommunication Services
Current price$107.84/sh
CompositionSubscription and affiliate fees 40% / Advertising 12% / Theme park admissions 12% / Retail and wholesale sales of merchandise, food and beverage 10% / Resort and vacations 10% / Merchandise licensing 4% / TV/VOD and home entertainment distribution 4% / Theatrical distribution licensing 3% / Other 5%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)5.5%
Operating margin today17.7%
Margin compression (value-band)-12.2pp
Multiple paid13x operating income

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 7.5% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

ReferenceValue
vs own history-0.76σ
cohort percentile (of 34 peers)32

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset2.48x5expensive
Earnings2.26x5expensive
Relative0.68x2justifies
Growth1.11x5expensive

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.

Per-Model Detail (n=17)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$73.321.47xyesFCF base $7.1B, growth 3% (input: historical growth), terminal g 3.4%, WACC 7.5%, 5yr projection
DCF Exit MultipleGrowth$97.151.11xyesExit EV/EBITDA: 8.1x / 10.1x / 12.1x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative——noP/E 16.9x (blended: static sector reference 14x + trailing (TTM) 24x), scenarios: 14.2x / 16.9x / 19.6x (bear / base = reference held flat / bull), EV/EBITDA 9x
Simple DDMGrowth$167.790.64xyesDPS $3.08, g=7.3% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDMGrowth$109.220.99xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$49.272.19xyesBV/sh $62.60, ROE (TTM) 7.3%, ke 9.3%
Two-Stage Excess ReturnAsset$43.482.48xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$78.021.38xyesRev $97.3B, growth 3% (input: historical growth; tapered), Terminal P/S: 1.6x / 1.9x / 2.2x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$154.420.70xyesEPS $4.41, growth 35% (input: historical EPS growth), PEG=0.68 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$68.551.57xyesNormalized EBIT (5y avg op income, one-time charges added back) $16.53B × (1−27%) / WACC 7.5% → EPV (no growth)
Residual IncomeAsset$42.622.53xyesBV $62.60 + 5yr PV of (ROE (TTM) 7.3% − Kₑ 9.3%) × BV; BV grows 4.7%/yr
Graham NumberAsset$78.831.37xyes√(22.5 × EPS $4.41 × BVPS $62.60) — Graham's conservative floor
EV/EBITDA RelativeRelative——noEBITDA $22.70B × sector EV/EBITDA 9.0x
FCF YieldEarnings$20.265.32xyesFCF $7110.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$11.229.61xyesSBC-adj FCF $5.66B (FCF $7.11B − SBC $1.45B) capitalized at Kₑ
Ben Graham FormulaEarnings$142.360.76xyesEPS $4.41 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$18.635.79xyesBV $62.60 × (ROIC 2.2% / WACC 7.5%)
P/Sales SectorRelative——noRevenue $97.26B × sector P/S 2.0x
PEG Fair ValueRelative$165.450.65xyesEPS $4.41 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$47.702.26xyesEPS $4.41 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

Material operating units span distinct economics, so a single sector multiple or target margin is not representative. Consolidated cash-flow lenses may remain as secondary checks, while segment SOTP is primary.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Entertainmentoperatingenterprise$42.5b$4.7b operating-income$100.0b indicative EV subtotalindicative enterprise value
Sportsoperatingenterprise$17.7b$2.9b operating-income$61.7b indicative EV subtotalindicative enterprise value
Experiencesoperatingenterprise$36.2b$10.0b operating-income$166.9b indicative EV subtotalindicative enterprise value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt$41.8b
Net debt / NOPAT (after-tax)3.31x
Net debt / operating income (pre-tax)2.42x
Share count CAGR (buyback)-0.8%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

Somewhere inside the argument about streaming, the theme parks got quiet. They should not have. In the fiscal year just reported, the Experiences segment produced $9,995 million of operating income, and the 10-K attributes the rise to growth at domestic parks and experiences and, to a lesser extent, consumer products and international parks and experiences. That single segment earns more than half of everything the company makes at the operating line, and it does it from admissions, hotel rooms, cruise cabins and merchandise, which is about as far from a content-slate lottery as entertainment economics get.

The momentum has not stopped. In the quarter ended March 28, 2026, Segment operating income increased $124 million, to $2,615 million from $2,491 million, primarily due to growth at domestic parks and experiences, and that was after absorbing higher depreciation at Disney Cruise Line and at Disneyland Paris. Depreciation rising on new ships and new park capacity is the cost of an expansion that has already been paid for in cash and is only now beginning to earn.

Now put the price against it. At $94.85 the market is paying about 11 times what the whole company earns at the operating line. Put more plainly, the quote sits below the level that even a business shrinking its operating profit by 5% a year would warrant. That is a strange thing to pay for a portfolio that spans a global parks and cruise business, a sports network that has just absorbed the NFL's own channels, and a character library competitors cannot rebuild.

Some of the future revenue is already contracted. The 10-Q puts unsatisfied performance obligations at $17 billion, primarily for IP to be made available in the future under existing agreements with merchandise and co-branding licensees and sponsors, wholesalers of streaming services, television station affiliates and sports sublicensees. Licensing a character to a toy maker or a sponsor is the closest thing in media to an annuity, and it costs almost nothing incremental to produce.

The sports position also strengthened without cash leaving the building. Buying the league's own media assets by handing the league a minority stake in your sports business aligns the two sides in a way a rights renewal never does.

Profitability sits in a reasonable place among the companies it competes with. Disney runs an 18.5% trailing operating margin. CMCSA converts 15.3% of its revenue into operating income across a much larger and more capital-heavy base. WBD is currently operating at a loss, with an operating margin of negative 4.6% on $37.2 billion of revenue. Against that field, the operating business is not the weak link, and the share count has come down slightly over the four years to March 2026 rather than drifting up.

Bear Case

The methods split down the middle here, and the split is not cosmetic. Peer multiples and the forward cash-flow approaches both land at or above today's price. The asset-value approaches put the price more than twice where they land, and the earnings-power approaches are not much kinder. That disagreement has a single cause, and it is worth understanding before deciding which side to believe: the distance between what Disney earns at the operating line and what actually turns into free cash.

Trailing operating profit runs about 18.2 billion dollars. Trailing free cash flow is roughly 7.1 billion dollars. The difference goes to interest on a large debt load, to taxes, and above all to the two things this company cannot stop buying, which are content and concrete. New cruise ships, new park capacity and a continuous film and television slate are not optional spending for a business whose whole proposition is that the experience is better than the alternative. Methods that capitalize operating profit flatter Disney; methods that capitalize the cash left after those commitments do not. The conservative reading is the second one.

The debt makes that gap matter more than it otherwise would. Net debt of roughly 41.8 billion dollars sits against liquid assets of about 5.7 billion dollars, and operating profit covers interest around ten times over, which is comfortable rather than commanding. Over the six months to March 28, 2026 the company increased borrowings by $4,989 million while paying $1,337 million in dividends. Growing the parks and returning cash at the same time is a legitimate choice. It is also one funded partly by lenders, and lenders are the constituency with the shortest patience in a downturn.

Then there is the part of the company that is being deliberately dismantled. Disney's own filing is direct about it: As part of our DTC strategy, we forgo revenue from certain traditional sources. Affiliate fees from cable channels are high-margin dollars that do not need to be re-earned each year, and streaming subscriptions are lower-margin dollars that do. Every subscriber the company gains on one side is partly a customer it is losing on the other, at worse economics, and the advertising environment does not help: the 10-K notes competition from search, social media, online marketplaces and other ad-supported DTC services, which depresses advertising rates across our DTC streaming services and linear networks and creates demand uncertainty.

The Experiences engine has its own ceiling. The filing acknowledges that Demand for certain out-of-home entertainment experiences, such as theater-going to watch movies, has not returned to levels that existed prior to the COVID-19 pandemic, and the parks business carries fixed costs that do not flex when attendance does. Labour is the near-term version of that risk, with the company noting collective bargaining agreements some of which are scheduled to expire in fiscal 2026 covering entertainment guilds and unions at the domestic parks.

The downside is not unbounded. Roughly 8 billion dollars of equity holdings sit outside the operating business, a little under 5% of market value, and the parks are real property that would fetch something in any conceivable restructuring. But a floor made of real estate and minority stakes is a poor consolation for an equity that has to grow to work, and the price already assumes essentially no growth at all. That cuts both ways: if the market is wrong, the upside is large, and if the market is right, there is not much left to discount.

Valuation

There is a floor implicit in this kind of arithmetic, and the price is sitting under it. Today's quote works out to roughly 11 times what the company earns at the operating line across the whole business, and that is low enough that the price sits below the level a business whose operating profit fell 5% a year would still warrant. This is a boundary rather than a forecast. Nobody is projecting decline. The point is that the price does not require growth in order to make arithmetic sense, which is an unusual position for a company of this profile to be in.

The peer comparison agrees. Measured against the media and entertainment companies it is grouped with, the multiple sits in the lower half of the range, and against the company's own recent record the pace embedded in the price is within what it has been delivering. Neither reference is flashing a warning. The read is broadly consistent with plausible growth rather than dependent on it.

The methods themselves are where the argument lives. Peer multiples land above today's price, and the forward cash-flow methods reach it, with the price sitting about 8% above where the growth-based approaches cluster. The asset-value approaches are the outliers, putting the price at more than twice their central estimate, and the earnings-power approaches sit well below it too. Read that pattern honestly and it says the price is defensible on the basis of what the business earns and what comparable companies fetch, and stretched on the basis of what the balance sheet contains and what the cash flow supports without growth.

The mechanism behind the earnings-power gap is the one number a reader should carry away. Free cash flow of about 7.1 billion dollars against operating profit of roughly 18.2 billion dollars is the reason a no-growth capitalization of cash produces such a low answer. Content and capacity spending is not an accounting artifact for this company; it is the business model. So the earnings-power methods are not wrong, they are simply asking a question, namely what this is worth if it never grows again, whose answer is genuinely unattractive.

Cohort position is the last piece. NFLX runs a 29.7% operating margin on $46.9 billion of revenue, which is what a business with no parks, no ships and no theatrical release schedule looks like. Disney's 18.5% trailing operating margin is the price of owning physical experiences, and CMCSA at 15.3% shows that physical assets and legacy distribution pull the same direction. The comparison that matters is not who has the highest margin but who converts an audience into repeat spending, and admissions, hotel nights and cruise cabins do that in a way a monthly subscription does not.

Solvency sets the boundary on all of it. Net debt near 41.8 billion dollars, liquid assets of about 5.7 billion dollars, interest covered around ten times by operating profit, no cash burn and a share count that has edged lower over four years describe a company with room but not slack. The debt is what makes the earnings-power reading uncomfortable rather than academic, and it is why the gap between operating profit and free cash is the number to watch each quarter rather than the subscriber count.

Catalysts

Fiscal third-quarter results arrive August 5, 2026. The line to watch is the Experiences segment, which grew operating income to $2,615 million from $2,491 million in the March quarter while absorbing higher depreciation from new capacity at Disney Cruise Line and Disneyland Paris. Whether that expansion is now earning its depreciation is the single most consequential question in the print.

Two structural transactions are still working through the numbers. Separately, the Fubo transaction contributed approximately $0.4 billion of revenue in the March quarter and $0.7 billion across the first six months of the fiscal year, and drove five percentage points of the increase in subscription and affiliate fees. Both deals change the shape of the Sports and Entertainment segments more than they change the totals, and the August print is the first clean look at either.

The cost side has its own calendar. The company has flagged that certain collective bargaining agreements with entertainment guilds and with unions at the domestic parks are scheduled to expire in fiscal 2026, and it has said those renewals will raise the cost of creating content and of running the parks. Rights costs are moving too, with college sports rights up and NBA rights down in the most recent quarter after contract renewals. Neither is a surprise event; both are the sort of thing that quietly determines whether the operating line holds.

Peer Cohorts (Per Segment, With Filing Citations)

Entertainment / Sports (reported)

Experiences (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Q2 FY2026 Form 10-Q, accession 0001744489-26-000037 · Disney scheduled Q3 FY2026 earnings date, August 5, 2026 · Q2 FY2026 Form 10-Q · FY2025 Form 10-K, accession 0001744489-25-000155

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