Shares of The Walt Disney Company (DIS) reached a new 52-week high of $58.82 on Monday, Apr 8, as the company’s ad sales, domestic resort reservations and booking rates are witnessing healthy trends.
Shares of Disney have risen approximately 15.1% year to date. Disney currently trades at a forward P/E of 17.12x, a 9% premium to the peer group average of 15.70x.
Disney continues to invest in its core businesses to create long-term growth opportunities. Disney entered into several content distribution agreements with companies like Comcast Corp (CMCSA), Netflix Inc. (NFLX), Charter Communications Inc. (CHTR) and Cox Communications, which strengthen its multichannel subscription model by adding more platforms to deliver its content. The company remains focused to generate increased income from affiliate deals and retransmission renewals.
Further, strong performance of its Media Networks division continues to boost the top and bottom-line results. Going forward, management remains confident of a strong performance by ESPN as it remains the favorite destination of sports lovers and possesses the right mix of exclusive sporting licenses with top sporting leagues.
Moreover, Disney has been actively managing its cash flow, returning much of its free cash to shareholders via share repurchases and dividends. It bought back 21 million shares for approximately $1 billion. In Nov 2012, the company increased its quarterly dividend by 25%, bringing the annualized payout to 75 cents per share.
We believe, with a strong slate of releases including Iron Man 3, Monsters Inc. 2, The Lone Ranger and Planes, the company remains well positioned to drive revenue growth in the coming quarters.
Currently shares of Disney maintain a Zacks Ranks #3 (Hold).
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