A Fresh Look at Disney (DIS) Valuation After YouTube TV Carriage Dispute Impacts Distribution and Revenue

Investors in Walt Disney (DIS) are watching closely as the company's channels, including ESPN and ABC, have gone dark on YouTube TV following a carriage dispute with Google. This situation immediately impacts Disney's reach and streaming revenue while negotiations continue.

See our latest analysis for Walt Disney.

The carriage dispute with YouTube TV comes at a pivotal time for Disney, following a string of leadership changes and ongoing efforts to refresh its entertainment offerings. While the share price return for the past month has been essentially flat, Disney’s 18.6% total shareholder return over the last year shows clear improvement from its modest multi-year performance. Momentum has been building as a result of digital expansion and recent management changes, even with recent dips tied to revenue concerns and pressure in linear networks.

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The question facing investors now is whether Disney shares are undervalued after recent setbacks, or if the current price already reflects optimism about the company’s future growth and recent strategic changes.

Most Popular Narrative: 14.4% Undervalued

According to Cashflow_Queen, the narrative places Walt Disney's fair value at $131.50 per share, offering substantial upside compared to the last close at $112.62. The latest valuation draws on Disney's shifting business model, with a focus on direct-to-consumer profits and ESPN's transformation into a sports streaming powerhouse.

ESPN remains the most valuable live sports platform, and its evolving partnership with the NFL is a game-changer. Exclusive rights, expanded streaming packages, and the launch of ESPN Unlimited could make Disney the default home for professional football. The NFL partnership extends beyond linear broadcasts to streaming exclusives, international rights, and integrated advertising packages, creating enormous revenue upside.

Read the complete narrative.

Curious which key assumption powers this higher fair value? The real surprise lies in how blockbuster content, a revived sports strategy, and fresh earnings projections fuel an ambitious future price. Think Disney’s story is all about characters and parks? It is the bold financial targets controlling the narrative. Find out what is driving these numbers behind the scenes.

Result: Fair Value of $131.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, surging sports rights costs or renewed competition in streaming could quickly challenge these bullish assumptions and dampen Disney’s growth momentum.

Find out about the key risks to this Walt Disney narrative.

Another View: Multiple-Based Valuation

Taking a different angle, Disney trades at a price-to-earnings ratio of 17.5x, which looks inexpensive compared to peers averaging 84x, as well as the industry average of 24.5x. Even when compared to a fair ratio of 24.2x, the gap remains clear. Does this suggest hidden value, or could it indicate risks that the market is cautious about?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Walt Disney for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 840 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Walt Disney Narrative

If you have your own ideas or want to put these numbers to the test, there is nothing stopping you from building your own perspective on Disney with just a few clicks. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Walt Disney.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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