How Investors Are Reacting To Walt Disney (DIS) Expanding Its Cruise Business and Theme Parks

• In recent days, Disney announced plans to expand its cruise business with the addition of two new ships and unveiled progress on its Abu Dhabi theme park project.
• Investment to expand both Disney's physical experiences and media content, including major infrastructure upgrades at Walt Disney World and a "Far Cry" TV adaptation, underscores the company's ongoing diversification of revenue streams.
• We'll explore how Disney's cruise and theme park expansions could influence analysts' expectations for long-term revenue growth and profit margins.

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Walt Disney Investment Narrative Recap

To be a Disney shareholder, you essentially need to believe in its ability to grow earnings from a broad set of entertainment and experiences businesses, including streaming, intellectual property, and destination parks. The cruise and Abu Dhabi theme park expansion news shines a light on management’s growth ambitions, but does not appear to alter the company’s current biggest short term catalyst, better profitability from direct-to-consumer (DTC) streaming, and it does not materially reduce the most prominent risk: rising costs from large-scale investments outpacing revenue growth.

Among the recent announcements, the $170 million bond sale supporting Walt Disney World’s infrastructure upgrades is highly relevant. These investments go hand-in-hand with expansion plans and underscore Disney’s commitment to supporting new and existing park developments, which aligns closely with catalysts centered on driving higher occupancy and experiences revenue.

On the other hand, investors should remain alert to the risk that ongoing cost increases tied to these expansions could squeeze profit margins if attendance or spending falls short of expectations...

Read the full narrative on Walt Disney (it's free!)

Walt Disney's outlook anticipates $106.4 billion in revenue and $11.9 billion in earnings by 2028. Achieving this would require a 4.0% annual revenue growth rate and a $0.3 billion increase in earnings from the current $11.6 billion.

Uncover how Walt Disney's forecasts yield a $133.22 fair value, a 29% upside to its current price.

Exploring Other Perspectives

Nine fair value estimates from the Simply Wall St Community range from US$105.33 to US$133.22 per share. While opinions span widely, recent cruise and park expansions highlight how differences in growth and cost assumptions can influence views on Disney’s future performance.

Explore 9 other fair value estimates on Walt Disney - why the stock might be worth just $105.33!

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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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