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Disney Is A Conviction Buy

Seeking Alpha2021-11-04

Summary Disney today offers the opportunity to invest in a transition story at the relatively early stages. Investors today will likely be handsomely rewarded over time. Looking at Disney’s valuation...

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DOLLARCAT
·2021-11-06
Really impressive article and research. [强]
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Investors today will likely be handsomely rewarded over time.\nLooking at Disney’s valuation...\n\n<a href=\"https://seekingalpha.com/article/4465298-disney-is-conviction-buy\">网页链接</a>\n\n</div>\n","source":null,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Disney Is A Conviction Buy</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDisney Is A Conviction Buy\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-11-04 17:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4465298-disney-is-conviction-buy>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nDisney today offers the opportunity to invest in a transition story at the relatively early stages. Investors today will likely be handsomely rewarded over time.\nLooking at Disney’s valuation...\n\n<a href=\"https://seekingalpha.com/article/4465298-disney-is-conviction-buy\">网页链接</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"DIS","symbol_name":"迪士尼","start_time":0,"source_url":"https://seekingalpha.com/article/4465298-disney-is-conviction-buy","article_id":"1171459652","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1171459652","pubTimestamp":1636016608,"columns":[],"sourceInfo":null,"weMediaInfo":null,"summary":"Summary\n\nDisney today offers the opportunity to invest in a transition story at the relatively early","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"DIS":"迪士尼"},"translate_title":"迪斯尼是一个有信心的购买","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DIS":0.9},"content_text":"Summary\n\nDisney today offers the opportunity to invest in a transition story at the relatively early stages. Investors today will likely be handsomely rewarded over time.\nLooking at Disney’s valuation with a SOTP method shows significant undervaluation with attractive risk-reward.\nDisney is a conviction buy for me despite the execution risk.\n\nEnchantedFairy/iStock Editorial via Getty Images\nInvestment Thesis\nDisney’s (DIS) valuation is often misinterpreted, in my opinion. The company is at the early stages of a favorable transformation and will likely deliver results mirroring those of some great companies. Breaking the company into parts and valuing the segments individually is more appropriate than looking at the company as a whole as neither its history nor any other public company is an appropriate comparison. In doing so, I calculate 32% undervaluation with conservative estimates. I also calculate a very unlikely grey sky scenario of a 44% loss and a not-that-unlikely blue sky scenario of 72% gains. I love the risk-reward and am a buyer of the company with conviction despite the relatively high execution risk.\nMost Misjudge Disney’s Valuation\nA lot of investors overlook the underlying parts of Disney when looking at the company’s valuation. I’ve noticed this reading many SA articles that have neutral and bearish views on the stock. Most authors analyze comparing current multiples to Disney’s history. This method is significantly misleading as Disney is a different company today than it was a few years ago. It makes sense to use historical multiples in finding discounts arising from diversion from the mean with stable businesses. Comparing a changing business to its history is like comparing the multiples of companies with different operations.\nAnother thing I thought was wrong was the sales multiple used. Sales multiple only makes sense when comparing very similar companies as the profitability structure and accounting of revenues can change significantly. Even when comparing similar companies, intuition in adjusting premia is common to account for said differences. Comparing Disney’s current P/S to what it was years ago is a futile endeavor in assessing the company’s valuation.\nFurthermore, a certain amount of valuation premium compared to its history is warranted for Disney. Parks and studios make up a significant chunk of Disney earnings and thus valuation and they’ve been negatively affected by the pandemic. Studios had to delay launches due to production cuts and parks had to close down and consumers were afraid to travel to them. Now, with the pent-up demand and with the string of new launches, we should see this trend mean-revert. Revenues and earnings of the coming quarters will be higher than what they were in the pandemic times. Valuation adjusts to this fact which inflates trailing multiples.\nChanges in the Business Changes Multiples Permanently\nWhen a company pivots into a new model its multiple will adjust. A favorable pivot will bring a larger multiple and vice versa. I want to provide concrete examples to support my thesis with charts of sales multiples with accompanying price moves. First is the greatest of pivots, Netflix’s (NFLX) ramping of streaming from mailing DVDs. The pioneering trailblazer of streaming’s success is evident in its growing multiples. Next up, Adobe (ADBE) and Autodesk’s (ADSK) cloud transition. Autodesk followed Adobe’s lead in changing its business model from a license-based one to a favorable SaaS model, multiple expansions followed. And I have to mention perhaps the greatest of corporate pivots, the big daddy Microsoft’s switch to cloud and launch of Azure. The big and slow giant achieved an amazing feat and adapted to the age of cloud computing and earned a massive multiple expansion after years of contraction. And last but definitely not least let’s not forget about the store of everything Amazon’s (AMZN) launch of AWS. The company earned a new multiple with its new fast-growing, highly profitable business. The multiples went on to expand for years and years accompanied by a rocketing stock price.\n\nSource: Capital IQ\nOne judging these companies' values by comparing them to their history at the early stages of these transformative new launches would’ve missed the opportunity without fault. New ventures tend to be in a sector that is more favorable and/or faster-growing than the company's current operations as these are the areas where managements tend to invest in. And these new ventures tend to have higher multiples increasing the overall multiple of the consolidated company. Looking at history and saying that the current multiple is expensive is essentially assuming the same multiple for the new venture as the company and is wrong.\nDisney is transforming itself from an old-world business into a new world one and provides the opportunity to invest today at the relatively early stages of the charts listed above. Legacy operations vary from deeply unfavorable, chord-cutting ailed linear networks to boring studios, consumer products, and parks while the new DTC venture is a highly scalable, fast-growing, cloud-based SaaS operation in a secular growth area. The multiple difference is stark. It’s normal that Disney’s multiple today is significantly higher than before, especially considering the coming surge in demand from the consumer reopening. I think that the multiple will continue to grow as DTC makes up a growing part of the business mix.\nA Sum of the Parts Approach Shows that Disney Offers Excellent Risk-Reward\nI will conduct a sum of the parts (SOTP) valuation to make sense of the situation and to avoid the fallacy of missing different parts of the business while looking at the big picture. I will divide the company into five main sub-segments: 1) linear networks: the legacy broadcasting operations, 2) DTC: the new streaming services, 3) content sales/licensing: the studio segment and related distribution, 4) parks and experiences: theme parks and related revenue such as F&B, hospitality, and park merchandise, and 5) consumer products: Disney’s retail stores, merchandise, and licensed products. I believe that calculating an individual value for each segment reveals the fundamental value of the company much better than looking at historical multiples or comparing company level multiples to peers.\nI will analyze company valuation by breaking the financials apart and then multiplying them by appropriate multiples compared to appropriate peers. I will work on three scenarios using assumptions of various aggression: grey sky, base case, and blue sky. Take my work with a big grain of salt as it's more art than science. I will use my judgment in finding the correct multiple and peer group and my results will likely be biased by my view of the world. However, I’m very open to updating my work based on constructive criticism so please let me know if you have suggestions. I’m an owner of Disney stock and the true value of the company is important to me.\nAdditionally, I’m happy to share my work with anyone who wants it. Let me know if you do. Even breaking the financials apart is hours of work due to the uniquely terrible and inconsistent way that Disney reports segment results. Below are the inputs I’ll be using.\n\nLinear Networks Valuation\nI’m basing my linear networks work on EV/EBITDA and EV/Revenue multiples of the last twelve month values. I’m using broadcasting companies as my peer group. My grey and blue sky scenarios are the lowest and highest multiples in the peer group and my base case is the peer median. I’ve taken the initiative to award a higher-than-peer multiple in the base cases of many segments as I think that Disney’s incredible IP and power of its network and brand deserve it. But I didn’t on the networks segment as a) I don’t see a huge advantage over peers, and b) I wanted to be extra cautious on this segment as its future is in doubt. I’m calculating a $49 bn bear, $70 bn base, and $88 bn bull case valuations.\n\nDirect To Consumer Valuation\nThe DTC segment is the main one that will bring multiple expansion. It’s the AWS of Amazon and Azure of Microsoft. I’m using a peer group of streamers as well as B2C software subscription service vendors as I think that their dynamics are similar. I’m basing my work solely on the sales multiple as revenue is what’s most important for this group. My base case is a 3-turn premium to Netflix to adjust for Disney’s fast growth from nascent operations. Disney’s DTC revenues grew almost 60% YoY in its last quarter while Netflix grew less than 20%. I would say that this 3x premium to Netflix is even conservative and doesn’t sufficiently reflect the difference in growth. Moreover, Disney deserves a premium due to its greater IP. Disney’s content is best-in-class and can be watched and rewatched many times over. This moat will strengthen further as more of 21stCentury Fox content becomes available on the platform. In my opinion, the quality IP will translate into lower churn and higher customer lifetime value over time, and thus Disney’s current revenue is worth more than Netflix’s.\nMy bull and bear cases are the top and bottom multiples in the group. The calculation yields a bear case $60bn, base case $211 bn, and bull case $267 bn value.\n\nWhat is worth highlighting here is that even if Disney’s DTC offering fails as Sirius’ (SIRI) services did, they’re still worth >$60bn. And I want to state the obvious and say that this is an extremely unlikely scenario. First, the viability of Disney’s streaming offers has been proven by the recent demand, and it's almost certain that there’s a large room for it in the streaming market. And second, movie streaming is more profitable than music, especially for content owners. Disney doesn’t have to pay royalties to content producers as it produces the content itself. Its DTC operations are much more scalable than those of Spotify (SPOT) and Sirius and deserve much higher multiples.\nConsumer Products Valuation\nConsumer products division is often forgotten and bundled with parks. However, it’s a completely different business and should be looked at in isolation. Disney both operates its stores and licenses its merchandise globally. Merchandise sold in parks isn’t in this segment and is included in Parks & Experiences segment’s financials. My peer group here is of retailers or retail suppliers with strong brands and my chosen multiples are revenue and EBITDA.\nMy chosen multiple for my base case is that of RH (RH) as I think that the companies prime valuation suits that of Disney. RH has premium products and strong pricing power. Disney’s retail merchandise may not be premium the same way but it definitely has pricing power. Consumers will pay more for products with Disney characters’ logos on them. Disney also has growth potential in this segment leveraging the new content produced from studios. My low multiples are those of Build-A-Bear’s (BBW) peer group low and my peak multiples are once again RH for revenue but Callaway (ELY) for EBITDA. The results are $8 bn bear, and $33 bn, and $38 bn base and bull case valuations.\nThe chosen multiple yields\n\nContent Sales/Licensing Valuation\nThe content sales/licensing segment is the studios and related distribution. I’ve included Warner Music (WMG) due to the similarity in operations (producing content then distributing it) albeit in a different vertical. I will say that the peer group here isn’t perfect. Most large studios are consolidated into larger entities. I had to use the consolidated companies as peers which I don’t think is correct as the multiples for studios get diluted in the whole company. I’ve tried to adjust for this in my chosen multiples and give Disney a premium to peer average in my base case multiples. I went with peer low and high multiples for other cases.\nI chose to alter the valuation denominator for the entire group and use multiples over pre-pandemic values. I did this to cancel out the one-off effect of the pandemic and measure companies on their normal performance. Considering the backlog of releases that were delayed by the pandemic, I believe that a higher multiple is warranted. I choose Disney’s fiscal 2019 as the period which ends in September 2019 and adjusted peer multiples accordingly.\nThe valuation for the segment came out to be $18 bn, $41 bn, $65 bn for the three scenarios.\n\nParks and Experiences Valuation\nI’ve followed a similar method here to what I did in studios and used multiples over pre-pandemic values. Parks were also harmed by the pandemic, perhaps even more than movies. And the reopening will see even greater demand. People locked inside distancing for more than a year and a half will want to indulge themselves in travel. Many families will choose Disney parks. Even those that thought of it as expensive will likely indulge themselves. The reopening warrants a premium multiple.\nDisney deserves a premium on top of that. The company has amazing pricing power. They’ve raised prices by ridiculous amounts far outstripping inflation. Consumers still flock to the parks. The best-in-class IP combined give Disney’s parks unmatched appeal. The new content from studios has the power to fuel new growth. The parks of Disney deserve a significant premium to what other park operators trade at.\nI’ve used SeaWorld’s (SEAS) numbers as my bear case and built varying amounts of premia on top of that for the other scenarios. I believe that even higher multiples are more than fair given Disney’s advantages but I’ll stick with these as I want to remain on the conservative side of things. I get $116 bn, $132 bn, and $150 bn for the three scenarios.\n\nPutting it All Together Shows Significant Undervaluation\nCombining the values of 5 segments under the three scenarios yields $251 bn, $487 bn, and $609 bn in total EV. I want to account for the unallocated and shared OPEX which wasn’t reported in any of the segments. I multiply these costs by Disney’s current overall multiple and reduce them from the total EV. After reducing net debt as well I get implied market caps of $174 bn, $410 bn, and $531 bn for the three scenarios providing a 32% upside on the base case and a 44% loss and 72% gain on tail outcomes.\n\nI want to make a particular note here of the conservativeness of the analysis. The two most important segments’, DTCs and P&Es, bear cases are extremely bearish. I would think it improbable that Disney’s respective segments would trade at those multiples given today’s world. I think that the base case is highly achievable and that the blue sky scenario isn’t nearly as farfetched as the grey sky one and that it’s achievable as well.\nGiven the risk-reward to the upside, particularly considering the probabilities of the three scenarios, I’m a buyer of Disney with high conviction.\nThe Investment Comes with Large Execution Risk\nDisney may have huge potential but it has large execution risk as well. The largest portion of the valuation is tied to the nascent DTC operation. There is a lot that Disney needs to achieve to deliver on that front. I’m highly confident that it will. My belief is backed by the obvious demand for the content. I think that the company will be able to transfer at least some of its pricing power to the streaming business to make it a true software giant. However, if you don’t think that Disney will be able to deliver or that the future of the streaming industry is not as bright as valued for whatever reason, you may want to hold back.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[{"id":842438056,"gmtCreate":1636213899149,"gmtModify":1636213899236,"author":{"id":"4093999439023700","authorId":"4093999439023700","name":"DOLLARCAT","avatar":"https://static.tigerbbs.com/0fd437f238e3a34c28a35895e5129210","vip":1,"crmLevel":11,"crmLevelSwitch":0,"idStr":"4093999439023700","authorIdStr":"4093999439023700"},"htmlText":"Really impressive article and research.&nbsp;[强]&nbsp;","listText":"Really impressive article and research.&nbsp;[强]&nbsp;","text":"Really impressive article and research. [强]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://laohu8.com/post/842438056","repostId":1171459652,"repostType":2,"repost":{"id":"1171459652","kind":"news","pubTimestamp":1636016608,"share":"https://www.laohu8.com/m/news/1171459652?lang=zh_CN&edition=full","pubTime":"2021-11-04 17:03","market":"us","language":"en","title":"Disney Is A Conviction Buy<blockquote>迪士尼值得坚定买入</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1171459652","media":"Seeking Alpha","summary":"Summary\n\nDisney today offers the opportunity to invest in a transition story at the relatively early","content":"Summary<blockquote>总结</blockquote> <ul> <li>Disney today offers the opportunity to invest in a transition story at the relatively early stages. Investors today will likely be handsomely rewarded over time.</li> <li>Looking at Disney’s valuation with a SOTP method shows significant undervaluation with attractive risk-reward.</li> <li>Disney is a conviction buy for me despite the execution risk.</li> </ul> <img src=\"https://static.tigerbbs.com/4f931c901deb3918d74590c419b386ca\" tg-width=\"1536\" tg-height=\"1024\" width=\"100%\" height=\"auto\">EnchantedFairy/iStock Editorial via Getty Images<blockquote><ul><li>今天的迪士尼提供了在相对早期阶段投资转型故事的机会。随着时间的推移，今天的投资者可能会获得丰厚的回报。</li><li>用SOTP方法观察迪士尼的估值显示，估值严重低估，但风险回报具有吸引力。</li><li>尽管存在执行风险，但迪士尼对我来说是一个坚定的买入。</li></ul>EnchantedFairy/iStock社论来自Getty Images</blockquote> Investment Thesis<blockquote>投资论文</blockquote> Disney’s (DIS) valuation is often misinterpreted, in my opinion. The company is at the early stages of a favorable transformation and will likely deliver results mirroring those of some great companies. Breaking the company into parts and valuing the segments individually is more appropriate than looking at the company as a whole as neither its history nor any other public company is an appropriate comparison. In doing so, I calculate 32% undervaluation with conservative estimates. I also calculate a very unlikely grey sky scenario of a 44% loss and a not-that-unlikely blue sky scenario of 72% gains. I love the risk-reward and am a buyer of the company with conviction despite the relatively high execution risk.<blockquote>在我看来，迪士尼的（DIS）估值经常被误解。该公司正处于有利转型的早期阶段，可能会取得与一些伟大公司相似的业绩。将公司分成几个部分并对各个部分进行单独估值比将公司作为一个整体来看待更合适，因为无论是其历史还是任何其他上市公司都不是合适的比较。在此过程中，我根据保守估计计算出32%的低估。我还计算了一个非常不可能的灰色天空情景，即44%的损失，以及一个并非不可能的蓝天情景，即72%的收益。我喜欢风险回报，尽管执行风险相对较高，但我还是坚定地购买了该公司。</blockquote> Most Misjudge Disney’s Valuation<blockquote>大多数人误判迪士尼的估值</blockquote> A lot of investors overlook the underlying parts of Disney when looking at the company’s valuation. I’ve noticed this reading many SA articles that have neutral and bearish views on the stock. Most authors analyze comparing current multiples to Disney’s history. This method is significantly misleading as Disney is a different company today than it was a few years ago. It makes sense to use historical multiples in finding discounts arising from diversion from the mean with stable businesses. Comparing a changing business to its history is like comparing the multiples of companies with different operations.<blockquote>许多投资者在考虑迪士尼公司的估值时忽略了迪士尼的基础部分。我在阅读许多对该股持中性和看跌观点的SA文章时注意到了这一点。大多数作者分析将当前的倍数与迪士尼的历史进行比较。这种方法具有很大的误导性，因为今天的迪士尼与几年前相比是一家不同的公司。使用历史倍数来寻找因偏离稳定业务均值而产生的折扣是有意义的。将一个不断变化的企业与其历史进行比较，就像比较不同运营的公司的倍数。</blockquote> Another thing I thought was wrong was the sales multiple used. Sales multiple only makes sense when comparing very similar companies as the profitability structure and accounting of revenues can change significantly. Even when comparing similar companies, intuition in adjusting premia is common to account for said differences. Comparing Disney’s current P/S to what it was years ago is a futile endeavor in assessing the company’s valuation.<blockquote>我认为错误的另一件事是使用的销售倍数。销售倍数只有在比较非常相似的公司时才有意义，因为盈利结构和收入核算可能会发生重大变化。即使在比较类似的公司时，调整溢价的直觉也是解释上述差异的常见原因。将迪士尼目前的市盈率与多年前进行比较对于评估该公司的估值来说是徒劳的。</blockquote> Furthermore, a certain amount of valuation premium compared to its history is warranted for Disney. Parks and studios make up a significant chunk of Disney earnings and thus valuation and they’ve been negatively affected by the pandemic. Studios had to delay launches due to production cuts and parks had to close down and consumers were afraid to travel to them. Now, with the pent-up demand and with the string of new launches, we should see this trend mean-revert. Revenues and earnings of the coming quarters will be higher than what they were in the pandemic times. Valuation adjusts to this fact which inflates trailing multiples.<blockquote>此外，与历史相比，迪士尼有一定的估值溢价。公园和工作室占迪士尼收入和估值的很大一部分，但它们受到了疫情的负面影响。由于减产，电影公司不得不推迟上映，公园不得不关闭，消费者不敢去那里旅游。现在，随着被压抑的需求和一系列新产品的推出，我们应该会看到这种趋势均值回归。未来几个季度的收入和盈利将高于大流行时期。估值会根据这一事实进行调整，从而夸大了跟踪市盈率。</blockquote> Changes in the Business Changes Multiples Permanently<blockquote>业务的变化会永久地改变倍数</blockquote> When a company pivots into a new model its multiple will adjust. A favorable pivot will bring a larger multiple and vice versa. I want to provide concrete examples to support my thesis with charts of sales multiples with accompanying price moves. First is the greatest of pivots, Netflix’s (NFLX) ramping of streaming from mailing DVDs. The pioneering trailblazer of streaming’s success is evident in its growing multiples. Next up, Adobe (ADBE) and Autodesk’s (ADSK) cloud transition. Autodesk followed Adobe’s lead in changing its business model from a license-based one to a favorable SaaS model, multiple expansions followed. And I have to mention perhaps the greatest of corporate pivots, the big daddy Microsoft’s switch to cloud and launch of Azure. The big and slow giant achieved an amazing feat and adapted to the age of cloud computing and earned a massive multiple expansion after years of contraction. And last but definitely not least let’s not forget about the store of everything Amazon’s (AMZN) launch of AWS. The company earned a new multiple with its new fast-growing, highly profitable business. The multiples went on to expand for years and years accompanied by a rocketing stock price.<blockquote>当一家公司转向新模式时，其市盈率将会调整。有利的支点将带来更大的倍数，反之亦然。我想提供具体的例子来支持我的论点，用伴随价格变动的销售倍数图表。首先是最大的支点，Netflix(NFLX)通过邮寄DVD增加流媒体服务。流媒体成功的先驱在其不断增长的倍数中显而易见。接下来是Adobe(ADBE)和Autodesk(ADSK)的云过渡。Autodesk跟随Adobe的脚步，将其商业模式从基于许可证的模式转变为有利的SaaS模式，随后进行了多次扩张。我不得不提到也许是最伟大的企业转型，大老爹微软转向云并推出Azure。这个又大又慢的巨头实现了惊人的壮举，适应了云计算时代，在多年的收缩后赢得了巨大的倍数扩张。最后但同样重要的是，我们不要忘记亚马逊(AMZN)推出的AWS的一切商店。该公司凭借其快速增长、高利润的新业务获得了新的市盈率。随着股价的飙升，市盈率年复一年地扩大。</blockquote> <img src=\"https://static.tigerbbs.com/775122c6392f1e03e128f86a291c3d92\" tg-width=\"640\" tg-height=\"252\" width=\"100%\" height=\"auto\"><img src=\"https://static.tigerbbs.com/239be2347bdb8e8dd8bdcbd50565c612\" tg-width=\"640\" tg-height=\"246\" width=\"100%\" height=\"auto\"><img src=\"https://static.tigerbbs.com/5cb3922bc8f82958e9e2fb52243c8158\" tg-width=\"640\" tg-height=\"248\" width=\"100%\" height=\"auto\"><img src=\"https://static.tigerbbs.com/a282e0a6266ddc51f4586a4df7fc586a\" tg-width=\"640\" tg-height=\"249\" width=\"100%\" height=\"auto\"><blockquote></blockquote> <img src=\"https://static.tigerbbs.com/5a30863ae43df3e40bfdf9568e36f969\" tg-width=\"640\" tg-height=\"254\" width=\"100%\" height=\"auto\">Source: Capital IQ<blockquote>资料来源：Capital IQ</blockquote> One judging these companies' values by comparing them to their history at the early stages of these transformative new launches would’ve missed the opportunity without fault. New ventures tend to be in a sector that is more favorable and/or faster-growing than the company's current operations as these are the areas where managements tend to invest in. And these new ventures tend to have higher multiples increasing the overall multiple of the consolidated company. Looking at history and saying that the current multiple is expensive is essentially assuming the same multiple for the new venture as the company and is wrong.<blockquote>通过将这些公司与这些变革性新产品推出的早期阶段的历史进行比较来判断这些公司的价值，肯定会错过这个机会。新企业往往位于比公司当前业务更有利和/或增长更快的行业，因为这些是管理层倾向于投资的领域。这些新企业往往具有更高的市盈率，从而增加合并后公司的整体市盈率。纵观历史，说当前的市盈率昂贵，本质上是假设新企业的市盈率与公司的市盈率相同，这是错误的。</blockquote> Disney is transforming itself from an old-world business into a new world one and provides the opportunity to invest today at the relatively early stages of the charts listed above. Legacy operations vary from deeply unfavorable, chord-cutting ailed linear networks to boring studios, consumer products, and parks while the new DTC venture is a highly scalable, fast-growing, cloud-based SaaS operation in a secular growth area. The multiple difference is stark. It’s normal that Disney’s multiple today is significantly higher than before, especially considering the coming surge in demand from the consumer reopening. I think that the multiple will continue to grow as DTC makes up a growing part of the business mix.<blockquote>迪士尼正在将自己从旧世界业务转变为新世界业务，并在上述图表的相对早期阶段提供了投资机会。传统业务各不相同，从非常不利的、令人心碎的线性网络到无聊的工作室、消费品和公园，而新的DTC企业是一个长期增长领域的高度可扩展、快速增长、基于云的SaaS业务。倍数差异是明显的。迪士尼今天的市盈率明显高于以前是正常的，特别是考虑到消费者重新开放带来的需求激增。我认为，随着DTC在业务组合中所占的比例越来越大，该倍数将继续增长。</blockquote> A Sum of the Parts Approach Shows that Disney Offers Excellent Risk-Reward<blockquote>部分总和方法表明迪士尼提供了出色的风险回报</blockquote> I will conduct a sum of the parts (SOTP) valuation to make sense of the situation and to avoid the fallacy of missing different parts of the business while looking at the big picture. I will divide the company into five main sub-segments: 1) linear networks: the legacy broadcasting operations, 2) DTC: the new streaming services, 3) content sales/licensing: the studio segment and related distribution, 4) parks and experiences: theme parks and related revenue such as F&amp;B, hospitality, and park merchandise, and 5) consumer products: Disney’s retail stores, merchandise, and licensed products. I believe that calculating an individual value for each segment reveals the fundamental value of the company much better than looking at historical multiples or comparing company level multiples to peers.<blockquote>我将进行部分总和（SOTP）评估，以了解情况，并避免在着眼于大局时错过业务不同部分的谬误。我将公司分为五个主要子部门：1）线性网络：传统广播业务，2）DTC：新的流媒体服务，3）内容销售/许可：演播室部门和相关发行，4）公园和体验：主题公园和相关收入，例如餐饮、酒店和公园商品，以及5）消费品：迪士尼的零售店、商品和许可产品。我相信，计算每个细分市场的单个价值比查看历史倍数或将公司级别的倍数与同行进行比较更能揭示公司的基本价值。</blockquote> I will analyze company valuation by breaking the financials apart and then multiplying them by appropriate multiples compared to appropriate peers. I will work on three scenarios using assumptions of various aggression: grey sky, base case, and blue sky. Take my work with a big grain of salt as it's more art than science. I will use my judgment in finding the correct multiple and peer group and my results will likely be biased by my view of the world. However, I’m very open to updating my work based on constructive criticism so please let me know if you have suggestions. I’m an owner of Disney stock and the true value of the company is important to me.<blockquote>我将通过将财务数据分开，然后将其乘以与适当的同行进行比较的适当倍数来分析公司估值。我将使用各种攻击性的假设来研究三个场景：灰色天空、基本情况和蓝天。对我的作品半信半疑，因为它与其说是科学，不如说是艺术。我会用我的判断来寻找正确的倍数和同龄人群体，我的结果可能会因我对世界的看法而有所偏差。然而，我非常愿意根据建设性的批评更新我的工作，所以如果你有建议，请告诉我。我是迪士尼股票的所有者，公司的真正价值对我来说很重要。</blockquote> Additionally, I’m happy to share my work with anyone who wants it. Let me know if you do. Even breaking the financials apart is hours of work due to the uniquely terrible and inconsistent way that Disney reports segment results. Below are the inputs I’ll be using.<blockquote>此外，我很乐意与任何想要的人分享我的作品。如果你知道，请告诉我。由于迪士尼报告部门业绩的方式极其糟糕且不一致，即使将财务数据分开也需要花费数小时的工作。下面是我将使用的输入。</blockquote> <img src=\"https://static.tigerbbs.com/d23c348d7f6e07429699111643d63bd1\" tg-width=\"640\" tg-height=\"465\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Linear Networks Valuation<blockquote>线性网络估值</blockquote> I’m basing my linear networks work on EV/EBITDA and EV/Revenue multiples of the last twelve month values. I’m using broadcasting companies as my peer group. My grey and blue sky scenarios are the lowest and highest multiples in the peer group and my base case is the peer median. I’ve taken the initiative to award a higher-than-peer multiple in the base cases of many segments as I think that Disney’s incredible IP and power of its network and brand deserve it. But I didn’t on the networks segment as a) I don’t see a huge advantage over peers, and b) I wanted to be extra cautious on this segment as its future is in doubt. I’m calculating a $49 bn bear, $70 bn base, and $88 bn bull case valuations.<blockquote>我的线性网络工作基于过去12个月的EV/EBITDA和EV/收入倍数。我把广播公司作为我的同龄人。我的灰色和蓝天场景是同行组中最低和最高的倍数，我的基本情况是同行中位数。我主动在许多细分市场的基本案例中授予了高于同行的倍数，因为我认为迪士尼令人难以置信的知识产权及其网络和品牌的力量值得。但我没有在网络领域，因为a）我没有看到相对于同行的巨大优势，b）我想在这个领域格外谨慎，因为它的未来值得怀疑。我计算的熊市估值为490亿美元，基础估值为700亿美元，牛市估值为880亿美元。</blockquote> <img src=\"https://static.tigerbbs.com/ad837bf79cb399b59ce1b52a92b14030\" tg-width=\"640\" tg-height=\"162\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Direct To Consumer Valuation<blockquote>直接面向消费者估价</blockquote> The DTC segment is the main one that will bring multiple expansion. It’s the AWS of Amazon and Azure of Microsoft. I’m using a peer group of streamers as well as B2C software subscription service vendors as I think that their dynamics are similar. I’m basing my work solely on the sales multiple as revenue is what’s most important for this group. My base case is a 3-turn premium to Netflix to adjust for Disney’s fast growth from nascent operations. Disney’s DTC revenues grew almost 60% YoY in its last quarter while Netflix grew less than 20%. I would say that this 3x premium to Netflix is even conservative and doesn’t sufficiently reflect the difference in growth. Moreover, Disney deserves a premium due to its greater IP. Disney’s content is best-in-class and can be watched and rewatched many times over. This moat will strengthen further as more of 21stCentury Fox content becomes available on the platform. In my opinion, the quality IP will translate into lower churn and higher customer lifetime value over time, and thus Disney’s current revenue is worth more than Netflix’s.<blockquote>DTC细分市场是将带来多重扩张的主要细分市场。它是Amazon的AWS和微软的Azure。我使用的是一组同行流媒体以及B2C软件订阅服务供应商，因为我认为他们的动态是相似的。我的工作完全基于销售倍数，因为收入对这个团队来说是最重要的。我的基本情况是对Netflix进行3轮溢价，以适应迪士尼新兴业务的快速增长。迪士尼上个季度的DTC收入同比增长近60%，而Netflix的增长不到20%。我想说，相对于Netflix的3倍溢价甚至是保守的，并不能充分反映增长的差异。此外，迪士尼因其更大的IP而值得溢价。迪士尼的内容是一流的，可以多次观看和重看。随着更多21世纪福克斯内容在平台上提供，这条护城河将进一步加强。在我看来，随着时间的推移，优质IP将转化为更低的流失率和更高的客户终身价值，因此迪士尼目前的收入比Netflix更有价值。</blockquote> My bull and bear cases are the top and bottom multiples in the group. The calculation yields a bear case $60bn, base case $211 bn, and bull case $267 bn value.<blockquote>我的牛市和熊市案例是该组中最高和最低的倍数。根据计算，熊市价值为600亿美元，基本情况为2110亿美元，牛市价值为2670亿美元。</blockquote> <img src=\"https://static.tigerbbs.com/6ea3cc58658886e6176743280daba654\" tg-width=\"640\" tg-height=\"161\" width=\"100%\" height=\"auto\"><blockquote></blockquote> What is worth highlighting here is that even if Disney’s DTC offering fails as Sirius’ (SIRI) services did, they’re still worth &gt;$60bn. And I want to state the obvious and say that this is an extremely unlikely scenario. First, the viability of Disney’s streaming offers has been proven by the recent demand, and it's almost certain that there’s a large room for it in the streaming market. And second, movie streaming is more profitable than music, especially for content owners. Disney doesn’t have to pay royalties to content producers as it produces the content itself. Its DTC operations are much more scalable than those of Spotify (SPOT) and Sirius and deserve much higher multiples.<blockquote>这里值得强调的是，即使迪士尼的DTC产品像Sirius(SIRI)服务那样失败，它们的价值仍然超过600亿美元。我想陈述显而易见的事实，这是一个极不可能的情况。首先，迪士尼流媒体产品的可行性已经被最近的需求所证明，几乎可以肯定的是，它在流媒体市场上有很大的空间。其次，电影流媒体比音乐更有利可图，尤其是对内容所有者来说。迪士尼不必向内容制作者支付版税，因为它自己制作内容。其DTC业务比Spotify(SPOT)和Sirius的业务更具可扩展性，并且应该获得更高的倍数。</blockquote> Consumer Products Valuation<blockquote>消费品估值</blockquote> Consumer products division is often forgotten and bundled with parks. However, it’s a completely different business and should be looked at in isolation. Disney both operates its stores and licenses its merchandise globally. Merchandise sold in parks isn’t in this segment and is included in Parks &amp; Experiences segment’s financials. My peer group here is of retailers or retail suppliers with strong brands and my chosen multiples are revenue and EBITDA.<blockquote>消费品部门经常被遗忘，与公园捆绑在一起。然而，这是一个完全不同的行业，应该孤立地看待。迪士尼在全球范围内经营其商店并授权其商品。公园销售的商品不属于该部门，而是包含在公园和体验部门的财务数据中。我在这里的同行群体是拥有强大品牌的零售商或零售供应商，我选择的倍数是收入和EBITDA。</blockquote> My chosen multiple for my base case is that of RH (RH) as I think that the companies prime valuation suits that of Disney. RH has premium products and strong pricing power. Disney’s retail merchandise may not be premium the same way but it definitely has pricing power. Consumers will pay more for products with Disney characters’ logos on them. Disney also has growth potential in this segment leveraging the new content produced from studios. My low multiples are those of Build-A-Bear’s (BBW) peer group low and my peak multiples are once again RH for revenue but Callaway (ELY) for EBITDA. The results are $8 bn bear, and $33 bn, and $38 bn base and bull case valuations.<blockquote>我为基本案例选择的市盈率是RH(RH)，因为我认为该公司的主要估值适合迪士尼。RH拥有优质产品和强大的定价能力。迪士尼的零售商品可能没有同样的溢价，但它绝对有定价权。消费者会为带有迪士尼人物标志的产品支付更多费用。利用工作室制作的新内容，迪士尼在这一领域也具有增长潜力。我的低市盈率是Build-A-Bear(BBW)同行集团的低市盈率，我的峰值市盈率再次是收入的RH，但EBITDA的Callaway(ELY)。结果是熊市估值为80亿美元、330亿美元和380亿美元。</blockquote> The chosen multiple yields<blockquote>所选倍数收益率</blockquote> <img src=\"https://static.tigerbbs.com/b384a22812e613cae82c5aa2aacbd86a\" tg-width=\"640\" tg-height=\"188\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Content Sales/Licensing Valuation<blockquote>内容销售/授权估值</blockquote> The content sales/licensing segment is the studios and related distribution. I’ve included Warner Music (WMG) due to the similarity in operations (producing content then distributing it) albeit in a different vertical. I will say that the peer group here isn’t perfect. Most large studios are consolidated into larger entities. I had to use the consolidated companies as peers which I don’t think is correct as the multiples for studios get diluted in the whole company. I’ve tried to adjust for this in my chosen multiples and give Disney a premium to peer average in my base case multiples. I went with peer low and high multiples for other cases.<blockquote>内容销售/许可部门是工作室和相关发行。我之所以将华纳音乐（WMG）纳入其中，是因为尽管在不同的垂直领域，但其运营（制作内容然后分发）相似。我会说这里的同龄人群体并不完美。大多数大型工作室都被整合成更大的实体。我不得不将合并后的公司作为同行，我认为这是不正确的，因为工作室的倍数在整个公司中被稀释了。我试图在我选择的倍数中对此进行调整，并在我的基本情况倍数中给予迪士尼高于同行平均水平的溢价。对于其他情况，我选择了同行的低倍数和高倍数。</blockquote> I chose to alter the valuation denominator for the entire group and use multiples over pre-pandemic values. I did this to cancel out the one-off effect of the pandemic and measure companies on their normal performance. Considering the backlog of releases that were delayed by the pandemic, I believe that a higher multiple is warranted. I choose Disney’s fiscal 2019 as the period which ends in September 2019 and adjusted peer multiples accordingly.<blockquote>我选择改变整个集团的估值分母，并使用大流行前价值的倍数。我这样做是为了抵消疫情的一次性影响，并衡量公司的正常表现。考虑到因疫情而推迟的积压版本，我认为更高的倍数是有保证的。我选择迪士尼2019财年作为截至2019年9月的时期，并相应调整了同行倍数。</blockquote> The valuation for the segment came out to be $18 bn, $41 bn, $65 bn for the three scenarios.<blockquote>三种情况下，该细分市场的估值分别为180亿美元、410亿美元和650亿美元。</blockquote> <img src=\"https://static.tigerbbs.com/a87ff24e94fa379bb559742892fc1863\" tg-width=\"640\" tg-height=\"137\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Parks and Experiences Valuation<blockquote>公园和体验估值</blockquote> I’ve followed a similar method here to what I did in studios and used multiples over pre-pandemic values. Parks were also harmed by the pandemic, perhaps even more than movies. And the reopening will see even greater demand. People locked inside distancing for more than a year and a half will want to indulge themselves in travel. Many families will choose Disney parks. Even those that thought of it as expensive will likely indulge themselves. The reopening warrants a premium multiple.<blockquote>我在这里遵循了与我在工作室所做的类似的方法，并使用了大流行前值的倍数。公园也受到了疫情的伤害，也许比电影还要严重。重新开放将会带来更大的需求。被锁在距离里超过一年半的人会想沉迷于旅行。很多家庭都会选择迪士尼乐园。即使是那些认为它昂贵的人也可能会放纵自己。重新开业保证了溢价倍数。</blockquote> Disney deserves a premium on top of that. The company has amazing pricing power. They’ve raised prices by&nbsp;ridiculous amounts&nbsp;far outstripping inflation. Consumers still flock to the parks. The best-in-class IP combined give Disney’s parks unmatched appeal. The new content from studios has the power to fuel new growth. The parks of Disney deserve a significant premium to what other park operators trade at.<blockquote>除此之外，迪士尼还应该获得溢价。该公司拥有惊人的定价权。他们提高价格的幅度远远超过了通货膨胀。消费者仍然涌向公园。一流的知识产权结合在一起，赋予了迪士尼乐园无与伦比的吸引力。来自工作室的新内容有能力推动新的增长。迪斯尼公园应该比其他公园运营商的交易价格有很大的溢价。</blockquote> I’ve used SeaWorld’s (SEAS) numbers as my bear case and built varying amounts of premia on top of that for the other scenarios. I believe that even higher multiples are more than fair given Disney’s advantages but I’ll stick with these as I want to remain on the conservative side of things. I get $116 bn, $132 bn, and $150 bn for the three scenarios.<blockquote>我使用海洋世界（SEAS）的数字作为我的熊市，并在此基础上为其他场景建立了不同数量的溢价。我相信，考虑到迪士尼的优势，更高的市盈率是非常公平的，但我会坚持这些，因为我想保持保守的一面。这三种情况分别为1160亿美元、1320亿美元和1500亿美元。</blockquote> <img src=\"https://static.tigerbbs.com/f1d427c62e5982a7a68ca517c1e37ed9\" tg-width=\"640\" tg-height=\"144\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Putting it All Together Shows Significant Undervaluation<blockquote>综合来看，估值明显被低估</blockquote> Combining the values of 5 segments under the three scenarios yields $251 bn, $487 bn, and $609 bn in total EV. I want to account for the unallocated and shared OPEX which wasn’t reported in any of the segments. I multiply these costs by Disney’s current overall multiple and reduce them from the total EV. After reducing net debt as well I get implied market caps of $174 bn, $410 bn, and $531 bn for the three scenarios providing a 32% upside on the base case and a 44% loss and 72% gain on tail outcomes.<blockquote>将三种情景下5个细分市场的价值结合起来，电动汽车总额将分别为2510亿美元、4870亿美元和6090亿美元。我想说明未分配和共享的运营支出，这些支出在任何细分市场中都没有报告。我将这些成本乘以迪士尼当前的总体倍数，然后从总电动汽车中减去它们。在减少净债务后，我得到这三种情景的隐含市值分别为1740亿美元、4100亿美元和5310亿美元，基本情景有32%的上涨空间，尾部结果有44%的损失和72%的收益。</blockquote> <img src=\"https://static.tigerbbs.com/153bca8cab0e1c08fe4f69485c1d08ef\" tg-width=\"408\" tg-height=\"360\" width=\"100%\" height=\"auto\"><blockquote></blockquote> I want to make a particular note here of the conservativeness of the analysis. The two most important segments’, DTCs and P&amp;Es, bear cases are extremely bearish. I would think it improbable that Disney’s respective segments would trade at those multiples given today’s world. I think that the base case is highly achievable and that the blue sky scenario isn’t nearly as farfetched as the grey sky one and that it’s achievable as well.<blockquote>我想在这里特别指出分析的保守性。DTC和P&amp;E这两个最重要的细分市场的熊市情况极其悲观。我认为，考虑到当今世界，迪士尼各自的部门不太可能以这些市盈率进行交易。我认为基本情况是非常可以实现的，蓝天场景并不像灰色天空那样牵强，也是可以实现的。</blockquote> Given the risk-reward to the upside, particularly considering the probabilities of the three scenarios, I’m a buyer of Disney with high conviction.<blockquote>考虑到上行的风险回报，特别是考虑到这三种情况的概率，我对迪士尼抱有很高的信心。</blockquote> The Investment Comes with Large Execution Risk<blockquote>这项投资伴随着巨大的执行风险</blockquote> Disney may have huge potential but it has large execution risk as well. The largest portion of the valuation is tied to the nascent DTC operation. There is a lot that Disney needs to achieve to deliver on that front. I’m highly confident that it will. My belief is backed by the obvious demand for the content. I think that the company will be able to transfer at least some of its pricing power to the streaming business to make it a true software giant. However, if you don’t think that Disney will be able to deliver or that the future of the streaming industry is not as bright as valued for whatever reason, you may want to hold back.<blockquote>迪士尼可能有巨大的潜力，但也有很大的执行风险。估值的最大部分与新生的DTC业务有关。在这方面，迪士尼需要取得很多成就。我非常有信心会的。我的信念得到了对内容的明显需求的支持。我认为该公司将能够将至少部分定价权转移到流媒体业务，使其成为真正的软件巨头。然而，如果你不认为迪士尼能够交付，或者流媒体行业的未来出于任何原因并不像估值那样光明，你可能要退缩。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Disney Is A Conviction Buy<blockquote>迪士尼值得坚定买入</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDisney Is A Conviction Buy<blockquote>迪士尼值得坚定买入</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nSeeking Alpha2021-11-04 17:03\n\n</h4>\n</header>\n<article>\nSummary<blockquote>总结</blockquote> <ul> <li>Disney today offers the opportunity to invest in a transition story at the relatively early stages. Investors today will likely be handsomely rewarded over time.</li> <li>Looking at Disney’s valuation with a SOTP method shows significant undervaluation with attractive risk-reward.</li> <li>Disney is a conviction buy for me despite the execution risk.</li> </ul> <img src=\"https://static.tigerbbs.com/4f931c901deb3918d74590c419b386ca\" tg-width=\"1536\" tg-height=\"1024\" width=\"100%\" height=\"auto\">EnchantedFairy/iStock Editorial via Getty Images<blockquote><ul><li>今天的迪士尼提供了在相对早期阶段投资转型故事的机会。随着时间的推移，今天的投资者可能会获得丰厚的回报。</li><li>用SOTP方法观察迪士尼的估值显示，估值严重低估，但风险回报具有吸引力。</li><li>尽管存在执行风险，但迪士尼对我来说是一个坚定的买入。</li></ul>EnchantedFairy/iStock社论来自Getty Images</blockquote> Investment Thesis<blockquote>投资论文</blockquote> Disney’s (DIS) valuation is often misinterpreted, in my opinion. The company is at the early stages of a favorable transformation and will likely deliver results mirroring those of some great companies. Breaking the company into parts and valuing the segments individually is more appropriate than looking at the company as a whole as neither its history nor any other public company is an appropriate comparison. In doing so, I calculate 32% undervaluation with conservative estimates. I also calculate a very unlikely grey sky scenario of a 44% loss and a not-that-unlikely blue sky scenario of 72% gains. I love the risk-reward and am a buyer of the company with conviction despite the relatively high execution risk.<blockquote>在我看来，迪士尼的（DIS）估值经常被误解。该公司正处于有利转型的早期阶段，可能会取得与一些伟大公司相似的业绩。将公司分成几个部分并对各个部分进行单独估值比将公司作为一个整体来看待更合适，因为无论是其历史还是任何其他上市公司都不是合适的比较。在此过程中，我根据保守估计计算出32%的低估。我还计算了一个非常不可能的灰色天空情景，即44%的损失，以及一个并非不可能的蓝天情景，即72%的收益。我喜欢风险回报，尽管执行风险相对较高，但我还是坚定地购买了该公司。</blockquote> Most Misjudge Disney’s Valuation<blockquote>大多数人误判迪士尼的估值</blockquote> A lot of investors overlook the underlying parts of Disney when looking at the company’s valuation. I’ve noticed this reading many SA articles that have neutral and bearish views on the stock. Most authors analyze comparing current multiples to Disney’s history. This method is significantly misleading as Disney is a different company today than it was a few years ago. It makes sense to use historical multiples in finding discounts arising from diversion from the mean with stable businesses. Comparing a changing business to its history is like comparing the multiples of companies with different operations.<blockquote>许多投资者在考虑迪士尼公司的估值时忽略了迪士尼的基础部分。我在阅读许多对该股持中性和看跌观点的SA文章时注意到了这一点。大多数作者分析将当前的倍数与迪士尼的历史进行比较。这种方法具有很大的误导性，因为今天的迪士尼与几年前相比是一家不同的公司。使用历史倍数来寻找因偏离稳定业务均值而产生的折扣是有意义的。将一个不断变化的企业与其历史进行比较，就像比较不同运营的公司的倍数。</blockquote> Another thing I thought was wrong was the sales multiple used. Sales multiple only makes sense when comparing very similar companies as the profitability structure and accounting of revenues can change significantly. Even when comparing similar companies, intuition in adjusting premia is common to account for said differences. Comparing Disney’s current P/S to what it was years ago is a futile endeavor in assessing the company’s valuation.<blockquote>我认为错误的另一件事是使用的销售倍数。销售倍数只有在比较非常相似的公司时才有意义，因为盈利结构和收入核算可能会发生重大变化。即使在比较类似的公司时，调整溢价的直觉也是解释上述差异的常见原因。将迪士尼目前的市盈率与多年前进行比较对于评估该公司的估值来说是徒劳的。</blockquote> Furthermore, a certain amount of valuation premium compared to its history is warranted for Disney. Parks and studios make up a significant chunk of Disney earnings and thus valuation and they’ve been negatively affected by the pandemic. Studios had to delay launches due to production cuts and parks had to close down and consumers were afraid to travel to them. Now, with the pent-up demand and with the string of new launches, we should see this trend mean-revert. Revenues and earnings of the coming quarters will be higher than what they were in the pandemic times. Valuation adjusts to this fact which inflates trailing multiples.<blockquote>此外，与历史相比，迪士尼有一定的估值溢价。公园和工作室占迪士尼收入和估值的很大一部分，但它们受到了疫情的负面影响。由于减产，电影公司不得不推迟上映，公园不得不关闭，消费者不敢去那里旅游。现在，随着被压抑的需求和一系列新产品的推出，我们应该会看到这种趋势均值回归。未来几个季度的收入和盈利将高于大流行时期。估值会根据这一事实进行调整，从而夸大了跟踪市盈率。</blockquote> Changes in the Business Changes Multiples Permanently<blockquote>业务的变化会永久地改变倍数</blockquote> When a company pivots into a new model its multiple will adjust. A favorable pivot will bring a larger multiple and vice versa. I want to provide concrete examples to support my thesis with charts of sales multiples with accompanying price moves. First is the greatest of pivots, Netflix’s (NFLX) ramping of streaming from mailing DVDs. The pioneering trailblazer of streaming’s success is evident in its growing multiples. Next up, Adobe (ADBE) and Autodesk’s (ADSK) cloud transition. Autodesk followed Adobe’s lead in changing its business model from a license-based one to a favorable SaaS model, multiple expansions followed. And I have to mention perhaps the greatest of corporate pivots, the big daddy Microsoft’s switch to cloud and launch of Azure. The big and slow giant achieved an amazing feat and adapted to the age of cloud computing and earned a massive multiple expansion after years of contraction. And last but definitely not least let’s not forget about the store of everything Amazon’s (AMZN) launch of AWS. The company earned a new multiple with its new fast-growing, highly profitable business. The multiples went on to expand for years and years accompanied by a rocketing stock price.<blockquote>当一家公司转向新模式时，其市盈率将会调整。有利的支点将带来更大的倍数，反之亦然。我想提供具体的例子来支持我的论点，用伴随价格变动的销售倍数图表。首先是最大的支点，Netflix(NFLX)通过邮寄DVD增加流媒体服务。流媒体成功的先驱在其不断增长的倍数中显而易见。接下来是Adobe(ADBE)和Autodesk(ADSK)的云过渡。Autodesk跟随Adobe的脚步，将其商业模式从基于许可证的模式转变为有利的SaaS模式，随后进行了多次扩张。我不得不提到也许是最伟大的企业转型，大老爹微软转向云并推出Azure。这个又大又慢的巨头实现了惊人的壮举，适应了云计算时代，在多年的收缩后赢得了巨大的倍数扩张。最后但同样重要的是，我们不要忘记亚马逊(AMZN)推出的AWS的一切商店。该公司凭借其快速增长、高利润的新业务获得了新的市盈率。随着股价的飙升，市盈率年复一年地扩大。</blockquote> <img src=\"https://static.tigerbbs.com/775122c6392f1e03e128f86a291c3d92\" tg-width=\"640\" tg-height=\"252\" width=\"100%\" height=\"auto\"><img src=\"https://static.tigerbbs.com/239be2347bdb8e8dd8bdcbd50565c612\" tg-width=\"640\" tg-height=\"246\" width=\"100%\" height=\"auto\"><img src=\"https://static.tigerbbs.com/5cb3922bc8f82958e9e2fb52243c8158\" tg-width=\"640\" tg-height=\"248\" width=\"100%\" height=\"auto\"><img src=\"https://static.tigerbbs.com/a282e0a6266ddc51f4586a4df7fc586a\" tg-width=\"640\" tg-height=\"249\" width=\"100%\" height=\"auto\"><blockquote></blockquote> <img src=\"https://static.tigerbbs.com/5a30863ae43df3e40bfdf9568e36f969\" tg-width=\"640\" tg-height=\"254\" width=\"100%\" height=\"auto\">Source: Capital IQ<blockquote>资料来源：Capital IQ</blockquote> One judging these companies' values by comparing them to their history at the early stages of these transformative new launches would’ve missed the opportunity without fault. New ventures tend to be in a sector that is more favorable and/or faster-growing than the company's current operations as these are the areas where managements tend to invest in. And these new ventures tend to have higher multiples increasing the overall multiple of the consolidated company. Looking at history and saying that the current multiple is expensive is essentially assuming the same multiple for the new venture as the company and is wrong.<blockquote>通过将这些公司与这些变革性新产品推出的早期阶段的历史进行比较来判断这些公司的价值，肯定会错过这个机会。新企业往往位于比公司当前业务更有利和/或增长更快的行业，因为这些是管理层倾向于投资的领域。这些新企业往往具有更高的市盈率，从而增加合并后公司的整体市盈率。纵观历史，说当前的市盈率昂贵，本质上是假设新企业的市盈率与公司的市盈率相同，这是错误的。</blockquote> Disney is transforming itself from an old-world business into a new world one and provides the opportunity to invest today at the relatively early stages of the charts listed above. Legacy operations vary from deeply unfavorable, chord-cutting ailed linear networks to boring studios, consumer products, and parks while the new DTC venture is a highly scalable, fast-growing, cloud-based SaaS operation in a secular growth area. The multiple difference is stark. It’s normal that Disney’s multiple today is significantly higher than before, especially considering the coming surge in demand from the consumer reopening. I think that the multiple will continue to grow as DTC makes up a growing part of the business mix.<blockquote>迪士尼正在将自己从旧世界业务转变为新世界业务，并在上述图表的相对早期阶段提供了投资机会。传统业务各不相同，从非常不利的、令人心碎的线性网络到无聊的工作室、消费品和公园，而新的DTC企业是一个长期增长领域的高度可扩展、快速增长、基于云的SaaS业务。倍数差异是明显的。迪士尼今天的市盈率明显高于以前是正常的，特别是考虑到消费者重新开放带来的需求激增。我认为，随着DTC在业务组合中所占的比例越来越大，该倍数将继续增长。</blockquote> A Sum of the Parts Approach Shows that Disney Offers Excellent Risk-Reward<blockquote>部分总和方法表明迪士尼提供了出色的风险回报</blockquote> I will conduct a sum of the parts (SOTP) valuation to make sense of the situation and to avoid the fallacy of missing different parts of the business while looking at the big picture. I will divide the company into five main sub-segments: 1) linear networks: the legacy broadcasting operations, 2) DTC: the new streaming services, 3) content sales/licensing: the studio segment and related distribution, 4) parks and experiences: theme parks and related revenue such as F&amp;B, hospitality, and park merchandise, and 5) consumer products: Disney’s retail stores, merchandise, and licensed products. I believe that calculating an individual value for each segment reveals the fundamental value of the company much better than looking at historical multiples or comparing company level multiples to peers.<blockquote>我将进行部分总和（SOTP）评估，以了解情况，并避免在着眼于大局时错过业务不同部分的谬误。我将公司分为五个主要子部门：1）线性网络：传统广播业务，2）DTC：新的流媒体服务，3）内容销售/许可：演播室部门和相关发行，4）公园和体验：主题公园和相关收入，例如餐饮、酒店和公园商品，以及5）消费品：迪士尼的零售店、商品和许可产品。我相信，计算每个细分市场的单个价值比查看历史倍数或将公司级别的倍数与同行进行比较更能揭示公司的基本价值。</blockquote> I will analyze company valuation by breaking the financials apart and then multiplying them by appropriate multiples compared to appropriate peers. I will work on three scenarios using assumptions of various aggression: grey sky, base case, and blue sky. Take my work with a big grain of salt as it's more art than science. I will use my judgment in finding the correct multiple and peer group and my results will likely be biased by my view of the world. However, I’m very open to updating my work based on constructive criticism so please let me know if you have suggestions. I’m an owner of Disney stock and the true value of the company is important to me.<blockquote>我将通过将财务数据分开，然后将其乘以与适当的同行进行比较的适当倍数来分析公司估值。我将使用各种攻击性的假设来研究三个场景：灰色天空、基本情况和蓝天。对我的作品半信半疑，因为它与其说是科学，不如说是艺术。我会用我的判断来寻找正确的倍数和同龄人群体，我的结果可能会因我对世界的看法而有所偏差。然而，我非常愿意根据建设性的批评更新我的工作，所以如果你有建议，请告诉我。我是迪士尼股票的所有者，公司的真正价值对我来说很重要。</blockquote> Additionally, I’m happy to share my work with anyone who wants it. Let me know if you do. Even breaking the financials apart is hours of work due to the uniquely terrible and inconsistent way that Disney reports segment results. Below are the inputs I’ll be using.<blockquote>此外，我很乐意与任何想要的人分享我的作品。如果你知道，请告诉我。由于迪士尼报告部门业绩的方式极其糟糕且不一致，即使将财务数据分开也需要花费数小时的工作。下面是我将使用的输入。</blockquote> <img src=\"https://static.tigerbbs.com/d23c348d7f6e07429699111643d63bd1\" tg-width=\"640\" tg-height=\"465\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Linear Networks Valuation<blockquote>线性网络估值</blockquote> I’m basing my linear networks work on EV/EBITDA and EV/Revenue multiples of the last twelve month values. I’m using broadcasting companies as my peer group. My grey and blue sky scenarios are the lowest and highest multiples in the peer group and my base case is the peer median. I’ve taken the initiative to award a higher-than-peer multiple in the base cases of many segments as I think that Disney’s incredible IP and power of its network and brand deserve it. But I didn’t on the networks segment as a) I don’t see a huge advantage over peers, and b) I wanted to be extra cautious on this segment as its future is in doubt. I’m calculating a $49 bn bear, $70 bn base, and $88 bn bull case valuations.<blockquote>我的线性网络工作基于过去12个月的EV/EBITDA和EV/收入倍数。我把广播公司作为我的同龄人。我的灰色和蓝天场景是同行组中最低和最高的倍数，我的基本情况是同行中位数。我主动在许多细分市场的基本案例中授予了高于同行的倍数，因为我认为迪士尼令人难以置信的知识产权及其网络和品牌的力量值得。但我没有在网络领域，因为a）我没有看到相对于同行的巨大优势，b）我想在这个领域格外谨慎，因为它的未来值得怀疑。我计算的熊市估值为490亿美元，基础估值为700亿美元，牛市估值为880亿美元。</blockquote> <img src=\"https://static.tigerbbs.com/ad837bf79cb399b59ce1b52a92b14030\" tg-width=\"640\" tg-height=\"162\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Direct To Consumer Valuation<blockquote>直接面向消费者估价</blockquote> The DTC segment is the main one that will bring multiple expansion. It’s the AWS of Amazon and Azure of Microsoft. I’m using a peer group of streamers as well as B2C software subscription service vendors as I think that their dynamics are similar. I’m basing my work solely on the sales multiple as revenue is what’s most important for this group. My base case is a 3-turn premium to Netflix to adjust for Disney’s fast growth from nascent operations. Disney’s DTC revenues grew almost 60% YoY in its last quarter while Netflix grew less than 20%. I would say that this 3x premium to Netflix is even conservative and doesn’t sufficiently reflect the difference in growth. Moreover, Disney deserves a premium due to its greater IP. Disney’s content is best-in-class and can be watched and rewatched many times over. This moat will strengthen further as more of 21stCentury Fox content becomes available on the platform. In my opinion, the quality IP will translate into lower churn and higher customer lifetime value over time, and thus Disney’s current revenue is worth more than Netflix’s.<blockquote>DTC细分市场是将带来多重扩张的主要细分市场。它是Amazon的AWS和微软的Azure。我使用的是一组同行流媒体以及B2C软件订阅服务供应商，因为我认为他们的动态是相似的。我的工作完全基于销售倍数，因为收入对这个团队来说是最重要的。我的基本情况是对Netflix进行3轮溢价，以适应迪士尼新兴业务的快速增长。迪士尼上个季度的DTC收入同比增长近60%，而Netflix的增长不到20%。我想说，相对于Netflix的3倍溢价甚至是保守的，并不能充分反映增长的差异。此外，迪士尼因其更大的IP而值得溢价。迪士尼的内容是一流的，可以多次观看和重看。随着更多21世纪福克斯内容在平台上提供，这条护城河将进一步加强。在我看来，随着时间的推移，优质IP将转化为更低的流失率和更高的客户终身价值，因此迪士尼目前的收入比Netflix更有价值。</blockquote> My bull and bear cases are the top and bottom multiples in the group. The calculation yields a bear case $60bn, base case $211 bn, and bull case $267 bn value.<blockquote>我的牛市和熊市案例是该组中最高和最低的倍数。根据计算，熊市价值为600亿美元，基本情况为2110亿美元，牛市价值为2670亿美元。</blockquote> <img src=\"https://static.tigerbbs.com/6ea3cc58658886e6176743280daba654\" tg-width=\"640\" tg-height=\"161\" width=\"100%\" height=\"auto\"><blockquote></blockquote> What is worth highlighting here is that even if Disney’s DTC offering fails as Sirius’ (SIRI) services did, they’re still worth &gt;$60bn. And I want to state the obvious and say that this is an extremely unlikely scenario. First, the viability of Disney’s streaming offers has been proven by the recent demand, and it's almost certain that there’s a large room for it in the streaming market. And second, movie streaming is more profitable than music, especially for content owners. Disney doesn’t have to pay royalties to content producers as it produces the content itself. Its DTC operations are much more scalable than those of Spotify (SPOT) and Sirius and deserve much higher multiples.<blockquote>这里值得强调的是，即使迪士尼的DTC产品像Sirius(SIRI)服务那样失败，它们的价值仍然超过600亿美元。我想陈述显而易见的事实，这是一个极不可能的情况。首先，迪士尼流媒体产品的可行性已经被最近的需求所证明，几乎可以肯定的是，它在流媒体市场上有很大的空间。其次，电影流媒体比音乐更有利可图，尤其是对内容所有者来说。迪士尼不必向内容制作者支付版税，因为它自己制作内容。其DTC业务比Spotify(SPOT)和Sirius的业务更具可扩展性，并且应该获得更高的倍数。</blockquote> Consumer Products Valuation<blockquote>消费品估值</blockquote> Consumer products division is often forgotten and bundled with parks. However, it’s a completely different business and should be looked at in isolation. Disney both operates its stores and licenses its merchandise globally. Merchandise sold in parks isn’t in this segment and is included in Parks &amp; Experiences segment’s financials. My peer group here is of retailers or retail suppliers with strong brands and my chosen multiples are revenue and EBITDA.<blockquote>消费品部门经常被遗忘，与公园捆绑在一起。然而，这是一个完全不同的行业，应该孤立地看待。迪士尼在全球范围内经营其商店并授权其商品。公园销售的商品不属于该部门，而是包含在公园和体验部门的财务数据中。我在这里的同行群体是拥有强大品牌的零售商或零售供应商，我选择的倍数是收入和EBITDA。</blockquote> My chosen multiple for my base case is that of RH (RH) as I think that the companies prime valuation suits that of Disney. RH has premium products and strong pricing power. Disney’s retail merchandise may not be premium the same way but it definitely has pricing power. Consumers will pay more for products with Disney characters’ logos on them. Disney also has growth potential in this segment leveraging the new content produced from studios. My low multiples are those of Build-A-Bear’s (BBW) peer group low and my peak multiples are once again RH for revenue but Callaway (ELY) for EBITDA. The results are $8 bn bear, and $33 bn, and $38 bn base and bull case valuations.<blockquote>我为基本案例选择的市盈率是RH(RH)，因为我认为该公司的主要估值适合迪士尼。RH拥有优质产品和强大的定价能力。迪士尼的零售商品可能没有同样的溢价，但它绝对有定价权。消费者会为带有迪士尼人物标志的产品支付更多费用。利用工作室制作的新内容，迪士尼在这一领域也具有增长潜力。我的低市盈率是Build-A-Bear(BBW)同行集团的低市盈率，我的峰值市盈率再次是收入的RH，但EBITDA的Callaway(ELY)。结果是熊市估值为80亿美元、330亿美元和380亿美元。</blockquote> The chosen multiple yields<blockquote>所选倍数收益率</blockquote> <img src=\"https://static.tigerbbs.com/b384a22812e613cae82c5aa2aacbd86a\" tg-width=\"640\" tg-height=\"188\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Content Sales/Licensing Valuation<blockquote>内容销售/授权估值</blockquote> The content sales/licensing segment is the studios and related distribution. I’ve included Warner Music (WMG) due to the similarity in operations (producing content then distributing it) albeit in a different vertical. I will say that the peer group here isn’t perfect. Most large studios are consolidated into larger entities. I had to use the consolidated companies as peers which I don’t think is correct as the multiples for studios get diluted in the whole company. I’ve tried to adjust for this in my chosen multiples and give Disney a premium to peer average in my base case multiples. I went with peer low and high multiples for other cases.<blockquote>内容销售/许可部门是工作室和相关发行。我之所以将华纳音乐（WMG）纳入其中，是因为尽管在不同的垂直领域，但其运营（制作内容然后分发）相似。我会说这里的同龄人群体并不完美。大多数大型工作室都被整合成更大的实体。我不得不将合并后的公司作为同行，我认为这是不正确的，因为工作室的倍数在整个公司中被稀释了。我试图在我选择的倍数中对此进行调整，并在我的基本情况倍数中给予迪士尼高于同行平均水平的溢价。对于其他情况，我选择了同行的低倍数和高倍数。</blockquote> I chose to alter the valuation denominator for the entire group and use multiples over pre-pandemic values. I did this to cancel out the one-off effect of the pandemic and measure companies on their normal performance. Considering the backlog of releases that were delayed by the pandemic, I believe that a higher multiple is warranted. I choose Disney’s fiscal 2019 as the period which ends in September 2019 and adjusted peer multiples accordingly.<blockquote>我选择改变整个集团的估值分母，并使用大流行前价值的倍数。我这样做是为了抵消疫情的一次性影响，并衡量公司的正常表现。考虑到因疫情而推迟的积压版本，我认为更高的倍数是有保证的。我选择迪士尼2019财年作为截至2019年9月的时期，并相应调整了同行倍数。</blockquote> The valuation for the segment came out to be $18 bn, $41 bn, $65 bn for the three scenarios.<blockquote>三种情况下，该细分市场的估值分别为180亿美元、410亿美元和650亿美元。</blockquote> <img src=\"https://static.tigerbbs.com/a87ff24e94fa379bb559742892fc1863\" tg-width=\"640\" tg-height=\"137\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Parks and Experiences Valuation<blockquote>公园和体验估值</blockquote> I’ve followed a similar method here to what I did in studios and used multiples over pre-pandemic values. Parks were also harmed by the pandemic, perhaps even more than movies. And the reopening will see even greater demand. People locked inside distancing for more than a year and a half will want to indulge themselves in travel. Many families will choose Disney parks. Even those that thought of it as expensive will likely indulge themselves. The reopening warrants a premium multiple.<blockquote>我在这里遵循了与我在工作室所做的类似的方法，并使用了大流行前值的倍数。公园也受到了疫情的伤害，也许比电影还要严重。重新开放将会带来更大的需求。被锁在距离里超过一年半的人会想沉迷于旅行。很多家庭都会选择迪士尼乐园。即使是那些认为它昂贵的人也可能会放纵自己。重新开业保证了溢价倍数。</blockquote> Disney deserves a premium on top of that. The company has amazing pricing power. They’ve raised prices by&nbsp;ridiculous amounts&nbsp;far outstripping inflation. Consumers still flock to the parks. The best-in-class IP combined give Disney’s parks unmatched appeal. The new content from studios has the power to fuel new growth. The parks of Disney deserve a significant premium to what other park operators trade at.<blockquote>除此之外，迪士尼还应该获得溢价。该公司拥有惊人的定价权。他们提高价格的幅度远远超过了通货膨胀。消费者仍然涌向公园。一流的知识产权结合在一起，赋予了迪士尼乐园无与伦比的吸引力。来自工作室的新内容有能力推动新的增长。迪斯尼公园应该比其他公园运营商的交易价格有很大的溢价。</blockquote> I’ve used SeaWorld’s (SEAS) numbers as my bear case and built varying amounts of premia on top of that for the other scenarios. I believe that even higher multiples are more than fair given Disney’s advantages but I’ll stick with these as I want to remain on the conservative side of things. I get $116 bn, $132 bn, and $150 bn for the three scenarios.<blockquote>我使用海洋世界（SEAS）的数字作为我的熊市，并在此基础上为其他场景建立了不同数量的溢价。我相信，考虑到迪士尼的优势，更高的市盈率是非常公平的，但我会坚持这些，因为我想保持保守的一面。这三种情况分别为1160亿美元、1320亿美元和1500亿美元。</blockquote> <img src=\"https://static.tigerbbs.com/f1d427c62e5982a7a68ca517c1e37ed9\" tg-width=\"640\" tg-height=\"144\" width=\"100%\" height=\"auto\"><blockquote></blockquote> Putting it All Together Shows Significant Undervaluation<blockquote>综合来看，估值明显被低估</blockquote> Combining the values of 5 segments under the three scenarios yields $251 bn, $487 bn, and $609 bn in total EV. I want to account for the unallocated and shared OPEX which wasn’t reported in any of the segments. I multiply these costs by Disney’s current overall multiple and reduce them from the total EV. After reducing net debt as well I get implied market caps of $174 bn, $410 bn, and $531 bn for the three scenarios providing a 32% upside on the base case and a 44% loss and 72% gain on tail outcomes.<blockquote>将三种情景下5个细分市场的价值结合起来，电动汽车总额将分别为2510亿美元、4870亿美元和6090亿美元。我想说明未分配和共享的运营支出，这些支出在任何细分市场中都没有报告。我将这些成本乘以迪士尼当前的总体倍数，然后从总电动汽车中减去它们。在减少净债务后，我得到这三种情景的隐含市值分别为1740亿美元、4100亿美元和5310亿美元，基本情景有32%的上涨空间，尾部结果有44%的损失和72%的收益。</blockquote> <img src=\"https://static.tigerbbs.com/153bca8cab0e1c08fe4f69485c1d08ef\" tg-width=\"408\" tg-height=\"360\" width=\"100%\" height=\"auto\"><blockquote></blockquote> I want to make a particular note here of the conservativeness of the analysis. The two most important segments’, DTCs and P&amp;Es, bear cases are extremely bearish. I would think it improbable that Disney’s respective segments would trade at those multiples given today’s world. I think that the base case is highly achievable and that the blue sky scenario isn’t nearly as farfetched as the grey sky one and that it’s achievable as well.<blockquote>我想在这里特别指出分析的保守性。DTC和P&amp;E这两个最重要的细分市场的熊市情况极其悲观。我认为，考虑到当今世界，迪士尼各自的部门不太可能以这些市盈率进行交易。我认为基本情况是非常可以实现的，蓝天场景并不像灰色天空那样牵强，也是可以实现的。</blockquote> Given the risk-reward to the upside, particularly considering the probabilities of the three scenarios, I’m a buyer of Disney with high conviction.<blockquote>考虑到上行的风险回报，特别是考虑到这三种情况的概率，我对迪士尼抱有很高的信心。</blockquote> The Investment Comes with Large Execution Risk<blockquote>这项投资伴随着巨大的执行风险</blockquote> Disney may have huge potential but it has large execution risk as well. The largest portion of the valuation is tied to the nascent DTC operation. There is a lot that Disney needs to achieve to deliver on that front. I’m highly confident that it will. My belief is backed by the obvious demand for the content. I think that the company will be able to transfer at least some of its pricing power to the streaming business to make it a true software giant. However, if you don’t think that Disney will be able to deliver or that the future of the streaming industry is not as bright as valued for whatever reason, you may want to hold back.<blockquote>迪士尼可能有巨大的潜力，但也有很大的执行风险。估值的最大部分与新生的DTC业务有关。在这方面，迪士尼需要取得很多成就。我非常有信心会的。我的信念得到了对内容的明显需求的支持。我认为该公司将能够将至少部分定价权转移到流媒体业务，使其成为真正的软件巨头。然而，如果你不认为迪士尼能够交付，或者流媒体行业的未来出于任何原因并不像估值那样光明，你可能要退缩。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://seekingalpha.com/article/4465298-disney-is-conviction-buy\">Seeking Alpha</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"DIS":"迪士尼"},"source_url":"https://seekingalpha.com/article/4465298-disney-is-conviction-buy","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1171459652","content_text":"Summary\n\nDisney today offers the opportunity to invest in a transition story at the relatively early stages. Investors today will likely be handsomely rewarded over time.\nLooking at Disney’s valuation with a SOTP method shows significant undervaluation with attractive risk-reward.\nDisney is a conviction buy for me despite the execution risk.\n\nEnchantedFairy/iStock Editorial via Getty Images\nInvestment Thesis\nDisney’s (DIS) valuation is often misinterpreted, in my opinion. The company is at the early stages of a favorable transformation and will likely deliver results mirroring those of some great companies. Breaking the company into parts and valuing the segments individually is more appropriate than looking at the company as a whole as neither its history nor any other public company is an appropriate comparison. In doing so, I calculate 32% undervaluation with conservative estimates. I also calculate a very unlikely grey sky scenario of a 44% loss and a not-that-unlikely blue sky scenario of 72% gains. I love the risk-reward and am a buyer of the company with conviction despite the relatively high execution risk.\nMost Misjudge Disney’s Valuation\nA lot of investors overlook the underlying parts of Disney when looking at the company’s valuation. I’ve noticed this reading many SA articles that have neutral and bearish views on the stock. Most authors analyze comparing current multiples to Disney’s history. This method is significantly misleading as Disney is a different company today than it was a few years ago. It makes sense to use historical multiples in finding discounts arising from diversion from the mean with stable businesses. Comparing a changing business to its history is like comparing the multiples of companies with different operations.\nAnother thing I thought was wrong was the sales multiple used. Sales multiple only makes sense when comparing very similar companies as the profitability structure and accounting of revenues can change significantly. Even when comparing similar companies, intuition in adjusting premia is common to account for said differences. Comparing Disney’s current P/S to what it was years ago is a futile endeavor in assessing the company’s valuation.\nFurthermore, a certain amount of valuation premium compared to its history is warranted for Disney. Parks and studios make up a significant chunk of Disney earnings and thus valuation and they’ve been negatively affected by the pandemic. Studios had to delay launches due to production cuts and parks had to close down and consumers were afraid to travel to them. Now, with the pent-up demand and with the string of new launches, we should see this trend mean-revert. Revenues and earnings of the coming quarters will be higher than what they were in the pandemic times. Valuation adjusts to this fact which inflates trailing multiples.\nChanges in the Business Changes Multiples Permanently\nWhen a company pivots into a new model its multiple will adjust. A favorable pivot will bring a larger multiple and vice versa. I want to provide concrete examples to support my thesis with charts of sales multiples with accompanying price moves. First is the greatest of pivots, Netflix’s (NFLX) ramping of streaming from mailing DVDs. The pioneering trailblazer of streaming’s success is evident in its growing multiples. Next up, Adobe (ADBE) and Autodesk’s (ADSK) cloud transition. Autodesk followed Adobe’s lead in changing its business model from a license-based one to a favorable SaaS model, multiple expansions followed. And I have to mention perhaps the greatest of corporate pivots, the big daddy Microsoft’s switch to cloud and launch of Azure. The big and slow giant achieved an amazing feat and adapted to the age of cloud computing and earned a massive multiple expansion after years of contraction. And last but definitely not least let’s not forget about the store of everything Amazon’s (AMZN) launch of AWS. The company earned a new multiple with its new fast-growing, highly profitable business. The multiples went on to expand for years and years accompanied by a rocketing stock price.\n\nSource: Capital IQ\nOne judging these companies' values by comparing them to their history at the early stages of these transformative new launches would’ve missed the opportunity without fault. New ventures tend to be in a sector that is more favorable and/or faster-growing than the company's current operations as these are the areas where managements tend to invest in. And these new ventures tend to have higher multiples increasing the overall multiple of the consolidated company. Looking at history and saying that the current multiple is expensive is essentially assuming the same multiple for the new venture as the company and is wrong.\nDisney is transforming itself from an old-world business into a new world one and provides the opportunity to invest today at the relatively early stages of the charts listed above. Legacy operations vary from deeply unfavorable, chord-cutting ailed linear networks to boring studios, consumer products, and parks while the new DTC venture is a highly scalable, fast-growing, cloud-based SaaS operation in a secular growth area. The multiple difference is stark. It’s normal that Disney’s multiple today is significantly higher than before, especially considering the coming surge in demand from the consumer reopening. I think that the multiple will continue to grow as DTC makes up a growing part of the business mix.\nA Sum of the Parts Approach Shows that Disney Offers Excellent Risk-Reward\nI will conduct a sum of the parts (SOTP) valuation to make sense of the situation and to avoid the fallacy of missing different parts of the business while looking at the big picture. I will divide the company into five main sub-segments: 1) linear networks: the legacy broadcasting operations, 2) DTC: the new streaming services, 3) content sales/licensing: the studio segment and related distribution, 4) parks and experiences: theme parks and related revenue such as F&B, hospitality, and park merchandise, and 5) consumer products: Disney’s retail stores, merchandise, and licensed products. I believe that calculating an individual value for each segment reveals the fundamental value of the company much better than looking at historical multiples or comparing company level multiples to peers.\nI will analyze company valuation by breaking the financials apart and then multiplying them by appropriate multiples compared to appropriate peers. I will work on three scenarios using assumptions of various aggression: grey sky, base case, and blue sky. Take my work with a big grain of salt as it's more art than science. I will use my judgment in finding the correct multiple and peer group and my results will likely be biased by my view of the world. However, I’m very open to updating my work based on constructive criticism so please let me know if you have suggestions. I’m an owner of Disney stock and the true value of the company is important to me.\nAdditionally, I’m happy to share my work with anyone who wants it. Let me know if you do. Even breaking the financials apart is hours of work due to the uniquely terrible and inconsistent way that Disney reports segment results. Below are the inputs I’ll be using.\n\nLinear Networks Valuation\nI’m basing my linear networks work on EV/EBITDA and EV/Revenue multiples of the last twelve month values. I’m using broadcasting companies as my peer group. My grey and blue sky scenarios are the lowest and highest multiples in the peer group and my base case is the peer median. I’ve taken the initiative to award a higher-than-peer multiple in the base cases of many segments as I think that Disney’s incredible IP and power of its network and brand deserve it. But I didn’t on the networks segment as a) I don’t see a huge advantage over peers, and b) I wanted to be extra cautious on this segment as its future is in doubt. I’m calculating a $49 bn bear, $70 bn base, and $88 bn bull case valuations.\n\nDirect To Consumer Valuation\nThe DTC segment is the main one that will bring multiple expansion. It’s the AWS of Amazon and Azure of Microsoft. I’m using a peer group of streamers as well as B2C software subscription service vendors as I think that their dynamics are similar. I’m basing my work solely on the sales multiple as revenue is what’s most important for this group. My base case is a 3-turn premium to Netflix to adjust for Disney’s fast growth from nascent operations. Disney’s DTC revenues grew almost 60% YoY in its last quarter while Netflix grew less than 20%. I would say that this 3x premium to Netflix is even conservative and doesn’t sufficiently reflect the difference in growth. Moreover, Disney deserves a premium due to its greater IP. Disney’s content is best-in-class and can be watched and rewatched many times over. This moat will strengthen further as more of 21stCentury Fox content becomes available on the platform. In my opinion, the quality IP will translate into lower churn and higher customer lifetime value over time, and thus Disney’s current revenue is worth more than Netflix’s.\nMy bull and bear cases are the top and bottom multiples in the group. The calculation yields a bear case $60bn, base case $211 bn, and bull case $267 bn value.\n\nWhat is worth highlighting here is that even if Disney’s DTC offering fails as Sirius’ (SIRI) services did, they’re still worth >$60bn. And I want to state the obvious and say that this is an extremely unlikely scenario. First, the viability of Disney’s streaming offers has been proven by the recent demand, and it's almost certain that there’s a large room for it in the streaming market. And second, movie streaming is more profitable than music, especially for content owners. Disney doesn’t have to pay royalties to content producers as it produces the content itself. Its DTC operations are much more scalable than those of Spotify (SPOT) and Sirius and deserve much higher multiples.\nConsumer Products Valuation\nConsumer products division is often forgotten and bundled with parks. However, it’s a completely different business and should be looked at in isolation. Disney both operates its stores and licenses its merchandise globally. Merchandise sold in parks isn’t in this segment and is included in Parks & Experiences segment’s financials. My peer group here is of retailers or retail suppliers with strong brands and my chosen multiples are revenue and EBITDA.\nMy chosen multiple for my base case is that of RH (RH) as I think that the companies prime valuation suits that of Disney. RH has premium products and strong pricing power. Disney’s retail merchandise may not be premium the same way but it definitely has pricing power. Consumers will pay more for products with Disney characters’ logos on them. Disney also has growth potential in this segment leveraging the new content produced from studios. My low multiples are those of Build-A-Bear’s (BBW) peer group low and my peak multiples are once again RH for revenue but Callaway (ELY) for EBITDA. The results are $8 bn bear, and $33 bn, and $38 bn base and bull case valuations.\nThe chosen multiple yields\n\nContent Sales/Licensing Valuation\nThe content sales/licensing segment is the studios and related distribution. I’ve included Warner Music (WMG) due to the similarity in operations (producing content then distributing it) albeit in a different vertical. I will say that the peer group here isn’t perfect. Most large studios are consolidated into larger entities. I had to use the consolidated companies as peers which I don’t think is correct as the multiples for studios get diluted in the whole company. I’ve tried to adjust for this in my chosen multiples and give Disney a premium to peer average in my base case multiples. I went with peer low and high multiples for other cases.\nI chose to alter the valuation denominator for the entire group and use multiples over pre-pandemic values. I did this to cancel out the one-off effect of the pandemic and measure companies on their normal performance. Considering the backlog of releases that were delayed by the pandemic, I believe that a higher multiple is warranted. I choose Disney’s fiscal 2019 as the period which ends in September 2019 and adjusted peer multiples accordingly.\nThe valuation for the segment came out to be $18 bn, $41 bn, $65 bn for the three scenarios.\n\nParks and Experiences Valuation\nI’ve followed a similar method here to what I did in studios and used multiples over pre-pandemic values. Parks were also harmed by the pandemic, perhaps even more than movies. And the reopening will see even greater demand. People locked inside distancing for more than a year and a half will want to indulge themselves in travel. Many families will choose Disney parks. Even those that thought of it as expensive will likely indulge themselves. The reopening warrants a premium multiple.\nDisney deserves a premium on top of that. The company has amazing pricing power. They’ve raised prices by ridiculous amounts far outstripping inflation. Consumers still flock to the parks. The best-in-class IP combined give Disney’s parks unmatched appeal. The new content from studios has the power to fuel new growth. The parks of Disney deserve a significant premium to what other park operators trade at.\nI’ve used SeaWorld’s (SEAS) numbers as my bear case and built varying amounts of premia on top of that for the other scenarios. I believe that even higher multiples are more than fair given Disney’s advantages but I’ll stick with these as I want to remain on the conservative side of things. I get $116 bn, $132 bn, and $150 bn for the three scenarios.\n\nPutting it All Together Shows Significant Undervaluation\nCombining the values of 5 segments under the three scenarios yields $251 bn, $487 bn, and $609 bn in total EV. I want to account for the unallocated and shared OPEX which wasn’t reported in any of the segments. I multiply these costs by Disney’s current overall multiple and reduce them from the total EV. After reducing net debt as well I get implied market caps of $174 bn, $410 bn, and $531 bn for the three scenarios providing a 32% upside on the base case and a 44% loss and 72% gain on tail outcomes.\n\nI want to make a particular note here of the conservativeness of the analysis. The two most important segments’, DTCs and P&Es, bear cases are extremely bearish. I would think it improbable that Disney’s respective segments would trade at those multiples given today’s world. I think that the base case is highly achievable and that the blue sky scenario isn’t nearly as farfetched as the grey sky one and that it’s achievable as well.\nGiven the risk-reward to the upside, particularly considering the probabilities of the three scenarios, I’m a buyer of Disney with high conviction.\nThe Investment Comes with Large Execution Risk\nDisney may have huge potential but it has large execution risk as well. The largest portion of the valuation is tied to the nascent DTC operation. There is a lot that Disney needs to achieve to deliver on that front. I’m highly confident that it will. My belief is backed by the obvious demand for the content. I think that the company will be able to transfer at least some of its pricing power to the streaming business to make it a true software giant. However, if you don’t think that Disney will be able to deliver or that the future of the streaming industry is not as bright as valued for whatever reason, you may want to hold back.","news_type":1,"symbols_score_info":{"DIS":0.9}},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"CN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":27,"commentSize":1,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"isCrawlerRequest":true}