If you have been eyeing Walt Disney stock lately and wondering whether this is the right moment to buy, hold, or sell, you are not alone. After all, the house of Mickey Mouse has delivered a 29.2% return over the last year, far outpacing the broader market and reigniting interest among both long-term fans and tactical traders. Yet even with that strong annual performance, the stock has cooled off a bit in recent weeks, slipping 1.7% over the past seven days and barely holding above breakeven for the past month.
What is really behind these moves? Some of the latest headlines help explain the changing investor sentiment. Disney’s ongoing legal tussle with Dish over streaming bundles and its recent high-profile MLB rights deals, giving ESPN exclusive dibs on out-of-market baseball games, signal both risk and opportunity for the media empire. Meanwhile, expansion of Marvel productions into the UK, driven by cost concerns in the US, highlights how Disney is shifting its playbook in response to global market dynamics. All these factors have contributed to a mixed, but still hopeful, view of the company’s growth potential heading into the next phase.
Of course, performance and news flow are only part of the story. When you drill down on the valuation numbers, Disney earns a value score of 3 out of 6. This means the stock looks undervalued in exactly half of the key checks we use to gauge whether a company is priced fairly or not. In the sections ahead, we will break down what those valuation methods are, how Disney stacks up against each one, and just as importantly, why sometimes the best way to understand value goes beyond just the numbers.
Why Walt Disney is lagging behind its peers
The Discounted Cash Flow (DCF) model helps estimate what a company is really worth by projecting its future cash flows and discounting those amounts back to today’s dollars. Essentially, it asks: how much are all the dollars Disney will generate in the coming years worth right now?
For Walt Disney, the analysis starts with a strong current Free Cash Flow (FCF) of $13.02 billion. Analysts expect some volatility in future years, but projections show that by 2029, annual FCF could be around $12.07 billion. Looking further ahead, using both analyst input for the near term and longer-term company estimates, cash flows up to 2035 are extrapolated. While FCF is projected to grow, these long-range numbers rely on best estimates because direct analyst forecasts typically cover only the next five years.
Based on the two-stage Free Cash Flow to Equity model, Disney’s intrinsic value is estimated at $95.74 per share. Compared to the current share price, the DCF suggests the stock is about 21.1% higher than what would be considered fair value. In short, the DCF analysis currently indicates Disney is overvalued.
Result: OVERVALUED
DIS Discounted Cash Flow as at Sep 2025
Our Discounted Cash Flow (DCF) analysis suggests Walt Disney may be overvalued by 21.1%. Find undervalued stocks or create your own screener to find better value opportunities.
The Price-to-Earnings (P/E) ratio is a tried and tested tool for evaluating profitable companies such as Walt Disney. It helps investors understand how much they are paying for each dollar of a company’s earnings, making it a useful yardstick for companies with established earnings and steady profit streams.
Assessing what makes a “normal” or fair P/E isn’t always straightforward. Expectations for future growth and business risks can justify higher or lower multiples. Fast-growing companies or those seen as less risky typically command a premium P/E, while slower-growing or riskier firms often trade on discounted ratios.
Walt Disney’s current P/E ratio stands at 18x. When we stack this against key benchmarks, it is considerably below the Entertainment industry average of 36x and beneath the average of close peers, which comes in at 85x. Looking deeper, Simply Wall St’s proprietary “Fair Ratio” for Disney is 24.13x. This Fair Ratio adjusts for factors that matter most, including Disney’s expected earnings growth, profit margins, market capitalization, risk profile, and its industry position. This makes it a more relevant gauge than just the industry or peer group averages.
Comparing the Fair Ratio (24.13x) to Disney’s current P/E (18x), the stock appears modestly undervalued based on this approach. The numbers suggest the market may not be fully appreciating Disney’s earnings potential right now.
Result: UNDERVALUED
NYSE:DIS PE Ratio as at Sep 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Earlier, we mentioned that sometimes the best way to understand value goes beyond just the numbers. Let’s introduce you to Narratives, a simple but powerful tool that lets you frame your investment decision around a company’s story.
A Narrative is your perspective on Disney’s future, blending your own expectations for revenue, earnings, and profit margins into a single, straightforward forecast. This ties the company’s story directly to a financial outlook and a target fair value.
Rather than getting lost in a sea of ratios, Narratives give you a structured way to turn the headlines, business changes, and market trends you care about into actionable investment logic, right on Simply Wall St’s Community page used by millions of other investors.
With Narratives, whenever key news or earnings updates arrive, your fair value and thesis are updated automatically. This helps you quickly judge whether now is the moment to buy, hold, or sell by comparing your Narrative-based Fair Value to Disney’s share price in real time.
For example, on the Community, different investors can reach dramatically different conclusions. Some estimate Disney’s fair value is as low as $79.00, focusing on rising competition and cost pressures, while others see it as high as $152.00, emphasizing global expansion, profitable franchises, and growing digital revenues.
For Walt Disney, we’ll make it straightforward with previews of two leading Walt Disney Narratives:
Fair Value Estimate: $132.23
Currently trading 12.3% below fair value
Expected annual revenue growth: 4.0%
Major investments in global cruise and theme park expansion, especially in emerging markets, are forecast to drive top-line growth and boost pricing power.
Integration of Disney+, Hulu, and ESPN, plus exclusive sports rights and refreshed intellectual property, is set to enhance recurring revenue and profit margins.
Risks include rising competition, shifts in audience habits, increasing content and operational costs, and potential franchise fatigue.
Fair Value Estimate: $95.94
Currently trading 20.9% above fair value
Expected annual revenue growth: 4.6%
Rising production and licensing costs, especially in streaming and sports, threaten profitability and may lead to subscriber loss as prices rise.
Intense competition from other streaming platforms and short-form video services like YouTube and TikTok is limiting Disney’s audience growth and advertising revenue.
Linear TV declines and cost pressures on theme parks and merchandising could dampen cash flows and erode profit margins, even if some segments remain resilient.
Do you think there’s more to the story for Walt Disney? Create your own Narrative to let the Community know!
NYSE:DIS Community Fair Values as at Sep 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include DIS.
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