How Will Disney’s Streaming Price Hikes Impact Its Share Value in 2025?

Thinking about what to do with your Walt Disney shares? You are definitely not alone. Disney's stock has held the spotlight for decades, but lately, the action has had more twists than a season finale. Over the past year, the share price climbed 19.2%, showing signs of a rebound. Still, it's been a bit of a bumpy journey. The stock was down 0.3% in the last week, slipped 3.9% over the past month, and has been basically flat so far this year with just a 2.4% return.

There is no shortage of headlines stirring up the conversation. Recently, drama around "Jimmy Kimmel Live!" led to swings in media coverage and some wrangling between broadcasters. Meanwhile, Disney announced price hikes for its streaming service that have investors wondering how customers will respond. Add in some activist pressure from major unions and ongoing talks with local TV partners, and it is no surprise that market sentiment has shifted from risk-off to cautiously optimistic.

If you are eyeing Disney's fundamentals, the real question is whether the stock looks undervalued or if expectations are already baked in. According to a detailed valuation analysis, Disney earns a solid value score of 3 out of 6, meaning it checks the box for undervaluation in half of the tested categories. So how should investors interpret these signals, and is there more to the story than what the numbers first suggest?

In the next section, let's break down how different valuation methods measure Disney's worth. Stay tuned for a more holistic approach to understanding its true value at the end of the article.

Why Walt Disney is lagging behind its peers

Approach 1: Walt Disney Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates the value of a company by projecting its expected cash flows into the future and discounting them back to today, using a rate that reflects the riskiness of those cash flows. This process helps determine what the business is intrinsically worth compared to its current stock price.

For Walt Disney, analysts estimate last year's Free Cash Flow at $13.0 billion. Looking ahead, projections show annual free cash flow fluctuating, with estimates provided up to 2029. By 2029, the forecasted Free Cash Flow is $12.1 billion. Beyond those years, further increases are extrapolated using a steady, modest rate.

According to this DCF analysis, Disney's estimated intrinsic value is $99.09 per share. With the current share price sitting about 14.5% higher than this intrinsic value, the DCF suggests Disney stock might be overvalued right now.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Walt Disney.

Our Discounted Cash Flow (DCF) analysis suggests Walt Disney may be overvalued by 14.5%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Walt Disney Price vs Earnings

The Price-to-Earnings (PE) ratio is a go-to valuation tool for profitable companies like Walt Disney, since it highlights how much investors are willing to pay for each dollar of current earnings. A company’s PE ratio is shaped largely by market expectations for future growth and how risky investors perceive its profits to be. Higher anticipated growth or lower risk typically means a higher “normal” PE ratio is justified, and vice versa.

Looking at the numbers, Disney currently trades at a PE ratio of 17.7x. This is well below the Entertainment industry average of 31.7x and also well under the average of its closest listed peers at 73.8x. At first glance, this might make Disney appear attractively priced. However, benchmarks like the industry or peer average can overlook key differences in each company’s growth outlook, business risks, and profit margins.

This is where Simply Wall St's "Fair Ratio" comes in. This is a custom metric that weighs all those unique factors, including Walt Disney’s projected earnings growth, size, profitability, and any company-specific risks. For Disney, the Fair Ratio works out to 24.5x, giving a more precise sense of what investors should expect to pay for the company’s earnings when considering its full context. Since Disney’s actual PE ratio of 17.7x is notably below the Fair Ratio, the stock currently leans into undervalued territory based on this approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Walt Disney Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personal story or viewpoint on a company, connecting what you believe about Disney's future, from revenue and profit growth to the big trends shaping its industry, to your own estimates and a resulting fair value.

Unlike traditional analysis, Narratives let you go beyond the numbers by articulating why you think Disney's next chapter will play out a certain way, linking your thesis to actual financial forecasts and what you consider to be fair value for the shares. Narratives are easy to create and update on Simply Wall St’s Community page, where millions of investors share their perspectives and forecasts in real time.

By comparing your Narrative’s Fair Value to Disney’s current share price, you can see when your story says it might be time to buy, hold, or sell. This helps you act with more conviction. Best of all, Narratives update as new company news, earnings, or data arrive, so your analysis can adapt automatically to the latest developments.

For example, some Disney Narratives are optimistic about global theme park demand and digital growth, translating into a highest fair value of $152 per share. Others factor in streaming competition and margin pressure, supporting a more cautious fair value as low as $79. This proves there is no single story, and your perspective really matters.

Do you think there's more to the story for Walt Disney? Create your own Narrative to let the Community know!

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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