Disney's 17.2 P/E Ratio Suggests Greater Potential than Netflix
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Stock Performance Comparison: Netflix's shares have surged 732% over the past decade, underscoring its leadership in the streaming wars, while Disney's stock trades 44% below its peak, indicating market caution regarding its future growth.
- Valuation Discrepancy: Disney's forward P/E ratio stands at 17.2, significantly lower than Netflix's 27.3, suggesting that this valuation gap could enable Disney to deliver higher returns for investors over the next five years.
- Direct-to-Consumer Profit Growth: Disney's direct-to-consumer segment saw operating income jump nearly tenfold in fiscal 2025 compared to fiscal 2024, with expectations for continued significant growth in the current fiscal year, enhancing its profitability.
- Investment Opportunity Assessment: Should Netflix's stock continue to decline, approaching a forward P/E ratio of 20, investors may reassess the investment opportunities between Netflix and Disney, potentially shifting funds towards the more attractively valued Disney.
Analyst Views on DIS
Wall Street analysts forecast DIS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DIS is 137.87 USD with a low forecast of 123.00 USD and a high forecast of 152.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
14 Buy
3 Hold
0 Sell
Strong Buy
Current: 113.410
Low
123.00
Averages
137.87
High
152.00
Current: 113.410
Low
123.00
Averages
137.87
High
152.00
About DIS
The Walt Disney Company is a diversified worldwide entertainment company. The Company's segments include Entertainment, Sports and Experiences. The Entertainment segment generally encompasses its non-sports focused global film and episodic content production and distribution activities. The lines of business within the Entertainment segment along with their business activities include Linear Networks, Direct-to-Consumer, and Content Sales/Licensing. The Sports segment encompasses its sports-focused global television and direct-to-consumer (DTC) video streaming content production and distribution activities. The lines of business within the Sports segment include ESPN and Star. The Experiences segment includes Parks and Experiences and Consumer Products. Parks and Experiences consists of Walt Disney World Resort in Florida, Disneyland Resort in California, Disney Cruise Line, and others. Consumer Products includes licensing of its trade names, characters, visual, literary and other IP.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
