Buffet Radar: Buy Walt Disney (DIS)
Disney, $DIS a behemoth in the entertainment business, has had some difficult years recently. First, the COVID-19 pandemic caused theme parks and theaters to close, significantly reducing the company's income. However, reopenings have made 2022 a transitional year for Disney as it strives to increase streaming revenue and maximize earnings at its theme parks.
For its media and entertainment segment, the fourth quarter of 2022 raised concerns, with sales falling by 3% yearly to $12.7 billion and operating income falling by 91% to $83 million. The category includes all of Disney's revenue from its film, TV, and streaming operations. It was most harmed by the company's $30 billion content investment made in 2022 to expand Disney+.
Disney's financial commitment to the system can seem excessive. Investors were alarmed, sending Disney shares down when its Q4 2022 numbers were released. However, the business has noticed benefits in the form of subscribers. Disney surpassed Netflix's 223 million streaming customers in the most recent quarter, reaching a total of 235.7 million.
Disney+ has amassed 164.2 million subscribers in three years, demonstrating the significant investment it has had to make in streaming to reach its dominant position. Finally, Disney would be in a great position to make significant gains in the long run, given that the $372 billion streaming business.
Nevertheless, DIS has a solid economic moat and can protect its future cash flow due to its strong branding.