The Walt Disney Co (DIS) DCF Valuation: Is The Stock Undervalued?

Johnny HopkinsStock ScreenerLeave a Comment

As part of a new series, each week we typically conduct a DCF on one of the companies in our screens. This week we thought we’d take a look at one of the stocks that are not currently in our screens, The Walt Disney Co (DIS).


Walt Disney owns the rights to some of the most globally recognized characters, from Mickey Mouse to Luke Skywalker. These characters and others are featured in several Disney theme parks around the world. Disney makes live-action and animated films under studios such as Pixar, Marvel, and Lucasfilm and also operates media networks including ESPN and several TV production studios. Disney shifted into a more streaming-focused firm by acquiring the remainder of Hulu and launching Disney+ and ESPN+. Across its streaming platforms, Disney had over 235 million subscribers as of September 2022, up sharply from under 64 million in December 2019.

Recent Performance

Over the past twelve months the share price is down 1.18%.

DIS Chart

DIS data by YCharts


  • Discount Rate: 8.81%
  • Terminal Growth Rate: 2%
  • WACC: 8.81%

Forecasted Free Cash Flows (FCFs)

Year FCF (billions) PV(billions)
2024 3.36 3.11
2025 3.59 3.07
2026 3.84 3.04
2027 4.1 3.00
2028 4.38 2.97

Terminal Value

Terminal Value = FCF * (1 + g) / (r – g) = 73.24 billion

Present Value of Terminal Value

PV of Terminal Value = Terminal Value / (1 + WACC)^5 = 49.62 billion

Present Value of Free Cash Flows

Present Value of FCFs = ∑ (FCF / (1 + r)^n) = 15.19 billion

Enterprise Value

Enterprise Value = Present Value of FCFs + Present Value of Terminal Value = 64.81 billion

Net Debt

Net Debt = Total Debt – Total Cash = 32.25 billion

Equity Value

Equity Value = Enterprise Value – Net Debt = 32.56 billion

Per-Share DCF Value

Per-Share DCF Value = Enterprise Value / Number of Shares Outstanding = $17.79


DCF Value Current Price Margin of Safety
$17.79 $95.07 -434.41%

Based on the DCF valuation, the stock is overvalued. The DCF value of $17.79 per share is lower than the current market price of $95.07. The Margin of Safety is -434.41%.

It is important to note that this valuation is based on a number of assumptions, and these assumptions could change in the future. This valuation is meant to be a back-of-the-envelope analyse that could be used as a starting point in a much more thorough valuation process. As a result, it is important to do your own research before making any investment decision.

For all the latest news and podcasts, join our free newsletter here.

FREE Stock Screener

Don’t forget to check out our FREE Large Cap 1000 – Stock Screener, here at The Acquirer’s Multiple:


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.