Disney was hit particularly hard by the pandemic in 2020. The company was forced to close its theme parks, forego releasing movies in the cinema, and suspend its cruise line activities.
The shutdown led to Disney posting its first annual loss in years, with a net income of -2.86bn for 2020. It also came at a time when the company had started investing billions in content for its recently launched Disney+ service.
After two years of modest profits, Disney has successfully navigated the significant issues facing it throughout the pandemic. Yet, Disney stock is still down over the past five years. So let’s take a look at how to buy Disney stock in 2023 and whether the company is a good investment today.
Step 1: Decide Where to Buy Disney Stock
Before we get into the fundamentals of Disney as an investment candidate, it’s important to know where to buy the stock. Choosing the right broker is key to maximising stock investments. Webull is our highest-rated trading platform, so let’s take a look at it.
Webull – Buy Disney for as Little as $5
Webull is an online broker based in the US. It offers some key strengths.
With Webull, you can choose from over 5,000 stocks. The downside is that the majority are in the US, although you can buy international stocks with Webull (including biotech stocks) using an ADR (American Depositary Receipt).
Apart from stocks, Webull offers other financial assets, including IRAs (Individual Retirement Accounts) and stock options (for advanced traders). This makes it a great option for US-based investors.
Moreover, you can buy stocks via credit card with Webull by simply charging your account balance with a card. But this comes with an $8 fee on Webull. Deposits on WeBull are free for all users who make ACH their payment method.
WeBull’s great app and website make it a particularly good platform for beginners, especially with the plethora of tools and learning materials for new investors.
Overall, Webull is a slick operation with plenty to offer the investing newbie.
| Number of Stocks | 5,000+ |
| Deposit Fee | ACH – free / Bank wire – $8 |
| Fee to Buy Disney Stock | Commission-Free |
| Minimum Deposit | $0 |
Your capital is at risk.
Step 2: Is Disney Stock a Good Investment?
The Nasdaq Composite index plunged 33% throughout 2022 as macroeconomic headwinds brought steep declines to consumer-reliant stocks. The Walt Disney Company was not unscathed, with its stock plunging almost 44% over the year.
Since the start of 2023, Disney shares have seen a slight recovery, rising 16% year to date as of March. However, its stock remains down 31% year on year.
Disney officially crosses one century of business this year, making it one of the most successful entertainment companies in history. But, it hasn’t had it easy in recent years. COVID-19 pandemic closures throughout 2020 and 2021 stunted revenue from theme parks and cinemas. Then, an economically burdened 2022 made it costly to expand in the streaming industry and fight for subscribers with Disney+. As a result, Disney’s stock is down 2% over the last five years.
While five-year stock growth is often a good metric when determining a company’s future growth, Disney is a unique case. Recent years have been filled with unavoidable headwinds, with its five-year stock decline unlikely to be indicative of what’s to come.
Last year saw a solid return of park guests, with Disney’s theme park segment reporting a revenue rise of 73% year over year to $28.7bn in fiscal 2022 and operating income soaring over 100% to $7.9bn. Meanwhile, a recent success at the box office with Avatar: The Way of Water becoming the third-highest-grossing film of all time worldwide proves theatre audiences are finally back as well.
As a result, Disney appears to be back on a growth path. Its forward price-to-earnings ratio of 24 has decreased 37% over the last year, making its stock a bargain buy right now.
What is Disney
Disney is one of the most recognised brands of all time, having introduced Mickey Mouse to the world in 1928. Headquartered in Burbank, California, US, the Walt Disney Company was founded in 1923 by two brothers, Walt and Roy Disney.
In the 20th century, Disney made a name for itself as the world’s leading producer of animated feature films. Since then, it has diversified widely into live-action feature films, television content and theme parks.
Disney’s operations are divided into two main segments:
- Disney Media and Entertainment Distribution
Making, streaming and licensing its own content. - Disney Parks, Experiences and Products
Disney describes this segment as ‘the global hub that brings Disney’s stories, characters, and franchises to life through theme parks and resorts, cruise and vacation experiences, and consumer products.’ Leading Disneyland resorts exist in Florida, California, Paris, Tokyo, Shanghai and Hong Kong.
Disney Stock Price History
Disney shares have declined 2% over the last five years and have risen 82% over the last decade (2013 – 2023). Its more immediate stock performance hasn’t been stellar, but the company does have a history of consistent growth over the long term. For instance, in the previous decade, from 2002 to 2012, Disney shares increased 76.5%, meaning this past decade improved on that figure, even accounting for the pandemic and economic headwinds in 2022.
Since the start of 2023, Disney shares have climbed 16%. In the first week of February, the company’s stock sympathetically rose as Netflix reported an addition of over 7 million new subscribers in its fourth quarter of 2022, with Wall Street hopeful Disney+ could replicate the success. The streaming platform disappointed investors by reporting a loss of about 2.4 million members in the same time period.
However, Disney has retained the majority of its stock rise since Jan. 1 thanks to its box office hit, Avatar: The Way of Water. The film generated $2.2433 billion worldwide as of Feb. 19, surpassing 1998’s Titanic to become the third-highest-grossing film of all time. According to Variety, producing and promoting the Avatar sequel cost about $460 million, suggesting Disney can look forward to a healthy boost to its entertainment and media segment.
Disney Stock Price – How Much is Disney Stock Worth
The Disney stock price today (March 2023) is around $100. Disney stock is down by around 30% in the last 12 months. The Disney stock price has been picking up steam in 2023, up by the aforementioned 16% so far this year. It’s also currently trading at significantly higher than its 52-week low of $84.
Disney EPS (Earnings Per Share)
Disney’s EPS for 2022 was 1.75.
There are many complexities to how companies calculate their EPS. Disney, for example, presents a diluted EPS figure, which does not take into account certain calculations.
However, what this figure of 1.75 means for the investor is that a) Disney is making a profit and b) for every one of its 1.83bn shares on the market, the company made $1.75 of profit from Q1-Q4 2022.
Disney’s 2022 EPS was up 57.85% on 2021’s figure of 1.11.
Disney Price-to-Earnings (P/E) Ratio
As of March 2023, Disney has a P/E ratio of 54. This means that the market rates Disney stock relatively high in comparison to the profits it makes. There are many factors behind this high valuation, including the fact that Disney is a legendary brand as well as one with plenty of plans for the future.
- Disney’s close rival, Comcast, has a P/E ratio of 30.
- Paramount Global, another media giant, has a P/E ratio of just under 25.
- Apple has a P/E ratio of 24.
Disney’s P/E ratio means the company’s stock is essentially overvalued compared to the above competitors.
Debt-to-Equity Ratio
Disney’s debt-to-equity ratio as of Q4 2022 is 0.45.
Simply put, Disney has nearly half as many debts as shareholder equity. Further, it has $202bn in assets and $108bn in debts. It has a ‘quick ratio’ of 0.93, which measures its ability to pay off all its debts instantly. A quick ratio of at least 1 is considered strong.
Overall, Disney presents no obvious short-to-medium-term financial risks.
Disney Stock Dividends
Dividends are payments that some companies pay out to shareholders on a quarterly or semi-annual basis.
To be eligible to receive a dividend payment, investors have to be holding stock at the time of the ‘ex-dividend’ date.
Disney used to be among the most popular dividend stocks, paying out dividends on a semi-annual basis. But in July 2020, it suspended its dividend payments after 40 years of payouts. This was down to financial pressures caused by the pandemic.
Disney had generally paid a dividend of between 1.2% and 1.8%. This dividend yield is relatively low in the media industry. But it doesn’t mean that Disney is stingy: historically, Disney has also generated investor returns from share buybacks, which offer investors the advantage of tax deferral.
Disney is one of the last holdouts of major companies that suspended dividends in the wake of the pandemic to have still not reintroduced the payment. The company is currently trying to bring down its debt levels from acquisitions, and its expected, though not announced, that the company may bring its dividends back after Disney+ starts to break even.
Disney has previously said that its goal is for Disney+ to turn a profit in 2024.
Disney Stock Price Forecast
Recent years haven’t been kind to Disney’s stock or its investors. However, a strong return of theme park attendees and cinema audiences, along with a swiftly growing streaming business, could lead to a fruitful future for The Walt Disney Company.
Disney held a leading 25.5% market share at the box office in the U.S. and Canada in 2021, with the industry worth $21.25 billion and projected to expand at a compound annual growth rate (CAGR) of 21.78% until at least 2025. As the home of potent content brands such as Star Wars, Marvel, Pixar, Avatar, and Walt Disney Studios, the company will likely profit significantly from the industry’s growth.
Meanwhile, its position in streaming is growing. Between Hulu and Disney+, the company held the most market share at 25% as of Q3 2022. For reference, the same figure for Netflix was 21%. Considering the streaming market is expected to see a CAGR of 21.3% through 2030, the House of Mouse’s dominance is promising for a longer-term Disney stock forecast of 2025 or 2030.
Recent years have made it challenging to produce an accurate Disney stock prediction, with its shares on a bit of a roller coaster ride since the COVID-19 pandemic struck in 2020. However, the company’s average 12-month price target of $129 is about 27.7% higher than its current position, making Disney’s stock a compelling investment.
High Risk/Reward
If you are an investor with an appetite for high risk and high reward, then Disney would not be your first choice.
Disney is an established brand with a massive market capitalisation of around $185bn. Whatever happens next to its share price, it is unlikely to spike like a crypto stock to double or triple its value any time soon. Likewise, given its size and prestige, its value is unlikely to vanish overnight. That’s particularly the case given its very reasonable debt leverage (see below).
High-risk investors might prefer to take the risks involved with buying cheap stocks or even penny stocks, particularly in the area of biotech.
Medium Risk/Reward
At this point in time, Disney could fall into the medium-risk category. Historically it has leant towards low risk, but the lingering effects of the pandemic and its recent acquisitions have nudged it up a notch. Apple stock is another good example of a medium-risk company that investors may be considering.
Apple is in the risky area of tech provision, which has taken a beating on the stock markets since the beginning of 2022. But, like Disney, Apple is a brand with unparalleled brand recognition among consumers as well as a leading provider in its various tech fields of computing and entertainment.
We might consider Disney stock to be a worthy alternative to Apple stock in terms of risk/reward, even though Apple, with a market capitalisation of $2.2trn, is over 10x bigger than Disney.
Low Risk/Reward
Disney is not a low-risk stock. Despite its supremacy as a brand known around the world, it is in the media industry. As proven in recent years, this is intrinsically riskier than many other sectors. One way of minimising risk whilst buying Disney stock would be to buy into it as part of an ETF.
Disney — Dual Business Focus
Since transitioning from an out-and-out animation production house, Disney has divided itself into two business segments. One makes and sells entertainment content, and the other segment runs theme parks and cruises. This dual business focus makes the stock resilient. If one half of the business runs into trouble, there is always the other to rely on for revenue. Of course, that’s not counting a once-in-a-century world pandemic that shut down both.
To solidify its business, Disney has conducted an aggressive policy of acquisitions.
Disney — Resilience through Acquisition
Giving it a deal of depth as an investment, Disney owns many key media companies:
- Televised Disney content is distributed via ABC, Disney, ESPN, Freeform, FX, Fox, National Geographic and Star.
- Disney film content is produced and marketed via Walt Disney Pictures, Twentieth Century Studios, Marvel, Lucasfilm, Pixar and Searchlight Pictures.
- Streaming content direct-to-consumer is provided by the Disney+, Hulu, ESPN+ and Star+ brands.
In Q2, 2022, Lightshed analyst Rich Greenfield said that Disney should acquire Netflix to buttress its position in the hugely-competitive streaming sector.
Disney — Resilience in its Balance Sheet
A slightly worrying feature of Disney’s balance sheet is that it operates with a low net profit margin of just over 10%. That means there is not a lot of room for error.
On the plus side, the Disney balance sheet also reveals that Disney has a long-term debt-to-equity ratio of 0.45. That means that it has nearly half as many debts as shareholder equity.
Rival Comcast, by contrast, has a less favourable long-term debt-to-equity ratio of 1.2.
Ideally, of course, the less debt a company has, the better. But companies need to invest in future products. The less debt a company has, the more resilient it is and the more upward pressure there is, therefore, on its share price.
Disney vs. the Competition
Disney’s closest rival is Comcast, another international multimedia giant that offers the same business blend of motion picture production, TV, streaming brands, and theme parks.
- Currently, Disney just edges out Comcast in terms of market capitalization ($184bn vs. $156bn).
- Both companies are close in size. Disney has 220,000 employees, while Comcast has 186,000.
- In terms of EPS — which analysts use as a measure of profitability — Disney overtook Comcast in 2022 with 1.75 to Comcast’s 1.21.
- With a P/E ratio of 30, Comcast shares are better valued than Disney’s with its P/E ratio of 54.
- In terms of share price, from March 2022 to 2023, Disney has shed 30% of its value, while Comcast has lost 20% of its value. This is in line with a general stock market correction brought about by fears over inflation and wider economic concerns.
Paramount Global is another key rival to Disney. You can buy Comcast (CMCSA) and Paramount Global (PARA) with broker Webull.
Disney Revenues Rebounding from Pandemic Pressures
As a proprietor of theme parks, Disney was hard hit by the Coronavirus Pandemic. As part of worldwide lockdowns, Disney had to close its parks in 2020.
- In July 2020, Disney suspended its usual dividend payments to ensure the financial survival of the company.
- In August 2021, Disney’s theme parks began reopening.
The company registered a loss of $2.86bn in 2020 for the first time in years. However, the company was able to recover in 2021 and 2022, posting modest profits of $2bn and $3.15bn, respectively.
Step 3: Open an Account and Buy Disney Stock
Now that we’ve covered Disney in detail let’s dive deeper into how to buy Disney stock. Other brokers are available, but we think Webull is the best trading platform to invest in Disney stock.
Step 1: Open an Account
To begin, head to the sign-up page and create an account with the email sign-up, or log in quickly using the Google/Facebook links at the top.
Step 2: Providing Basic Info and ID
After creating an account, users will be taken to the homepage, where they will then need to provide some more details in order to buy stocks.
To verify, users will need to provide their name, gender, and date of birth. It’s important that these details are correct as they will need to match the government ID that is required at the end of the verification.
After filling in the personal info, you will usually be asked about your trading experience, work, and income. This is so that platforms can protect users who are inexperienced from taking part in riskier aspects of the stock market, such as options trading.
Step 3: Deposit Funds
Depositing funds is simple. Click “Deposit Funds” from the homepage. Choose the amount to deposit and the funding source.
Step 4: Buy Disney Stock
After depositing funds, all that remains is to purchase Disney stock.
Search for Disney, and the dedicated page for the company will appear. Click “Invest,” and the window pictured above will pop up. Choose how you want to buy Disney stock and the amount.
That covers everything necessary to buy Disney stock now!
Is Disney Stock a Buy?
With the pausing of its dividend payments and the wider economic concerns looming over the stock market, Disney might not look like a solid buy right now. However, the company could be on the verge of reaping the rewards of its massive investments over the past few years.
Its Marvel acquisition has been a monster hit for the company, more than paying for itself in the years since the takeover. Now, it looks to have another monumental hit on its hands with the Avatar franchise. The latest movie is already the third highest-grossing of all time, and there are at least three more on the way.
Another hit franchise under its belt is also a boon for its ever-expanding Disney+ venture. The growth of Disney+ has been enormous since it launched at the end of 2019. If the company can meet its goal of bringing Disney+ into profit by 2024, then it will have a Netflix-sized revenue stream on its hands.
The Disney stock price is recovering quite quickly in 2023, but it’s still ever so slightly still down on the last five years. This year could be one of the last to buy Disney stock at its current valuation.
Conclusion
As an entertainment and media company, Disney operates in tough sectors. But, if you want to buy Disney stock, you can rest assured that there is plenty to be optimistic about: its low debt leverage, its established brand status and its ongoing willingness to acquire related brands and expand. After an extended period of price correction, Disney shares have a bright future, analysts are in agreement.
The company currently has a majority analyst rating of either a strong buy or a buy. For those who think Disney is the right stock for them, be sure to follow news on the company and pay attention to its ongoing financials. Finally, make sure to check out Webull for the best place to buy Disney stock.