Running The Numbers - placing an intrinsic value on Mickey Mouse ($DIS)
Walt Disney Company ($DIS) was founded in 1923 as an animation studio. Today $DIS is one of the largest media and entertainment companies in the world with annual revenues over US$35 billion. With the release of High School Musical 3 $DIS is continuing to refine their media strategy. $DIS is trading just above their 52-week low. How does the current share price look?
Valuecruncher valuation model of $DIS with interactive assumptions
Valuecruncher produces a valuation of US$26.45 for $DIS. This is a current valuation (an estimate of intrinsic value using a discounted cash flow model) not a target price. This valuation is 10.6% above the current share price of US$23.91.
Assumptions
- Revenue: Reuters aggregates 18 analysts covering $DIS and these analysts have a mean estimate of 2009 revenues of US$38.9 billion. For our analysis we have used US$38.5 billion in 2009, US$40.0 billion in 2010 and US$41.0 billion in 2011.
- Profitability: We have used an EBITDA margin of 20.0% flat to 2011. Reuters has $DIS‘s EBITD margin at 24.3% last year and 19.1% over the last five-years.
- Capital Expenditure: We have assumed capital expenditures of US$1.75 billion per annum moving forward.
- Discount Rate: 10.0%.
- Terminal Growth Rate: 3.0%.
Our analysis incorporates the cash and debt the $DIS balance sheet – Valuecruncher calculates a net debt number.
Play with our assumptions – what does your analysis say?
Disclosure: None
Tags: DIS