Consumer Discretionary
Global entertainment conglomerate spanning theme parks, streaming, film studios, and media networks.
View forensic reportThe consensus view is that Disney is a legacy media business stuck between a declining linear network cash cow and a structurally unprofitable streaming unit. Free cash flow of $10.1 billion, up from $4.9 billion two years ago, says the consensus is looking at old data.
Disney began cutting 1,000 jobs this week. The move reveals the cost problem the company has been dancing around since the streaming pivot.
Disney trades at 14.6x earnings — cheaper than Netflix at 40.7x — despite owning the most valuable IP library on the planet and a parks division generating record margins. The Street is fixated on streaming losses while ignoring the earnings power hiding in plain sight.
Streaming just turned profitable. Parks generate $8B in operating income. ESPN is getting its own platform. The IP library is permanent. The stock trades at a discount to the S&P.