WALT DISNEY (YAHOO FINANCE)

Part A-Fundamental Valuation:

P₀ = D₀ (1+G)/i-g= D₁/i-g

where

P₀ = current price of the stock

D₀ = dividend per share at the end of the last period

D₁ = dividend per share at the end of period 1

i = discount rate

g = constant growth rate

Estimate a growth rate for your firm's Dividends per Share.

Assume a 12.5% discount rate.

Calculate an estimated value of a share of the stock using the constant-growth model (Eq. 8-6 in the textbook), also known as the Gordon growth model.

Compare and contrast your valuation results with the current share price in the market.

Respond to this question: What changes in the variables would be necessary in your valuation to best approximate the market valuation?

Part B - Relative Valuation:

P₅ = (P/E)₅ E₅ = (P/E)₅ E₀ (1 + g)⁵

where

P₅ = price of the stock in five years

(P/E)₅ = price-earnings ratio in year 5

E₅ = Earnings per share in year 5

E₀ = Most recent Earnings per share

g = constant growth rate

Estimate a growth rate for your firm's Earnings per Share (EPS).

Determine an applicable Price-Earnings (P/E) ratio for your firm in 5 years.

Calculate an estimated value of a share of the stock in 5 years using the P/E ratio model (Eq. 8-10 in the textbook).

Respond to this question: Would you characterize your stock as undervalued or overvalued? Explain.

Respond to this question: Based on your valuations in parts A and B, would you invest in this stock? Explain.

WALT DISNEY (YAHOO FINANCE.COM)

SUMMARY PAGE:

Date	Dividends
12/8/2016	0.78
7/7/2016	0.71
12/10/2015	0.71
7/1/2015	0.66
12/11/2014	1.15
12/12/2013	0.86
12/6/2012	0.75
12/14/2011	0.6

111.76+0.05 (+0.04%)

At close: March 17 4:01PM EDT

Previous Close

111.71

Open

111.87

Bid

0.00 x

Ask

0.00 x

Day's Range

111.18 - 112.09

52 Week Range

90.32 - 112.89

Volume

9,061,194

Avg. Volume

6,555,508

Market Cap

176.72B

Beta

1.33

PE Ratio (TTM)

20.17

EPS (TTM)

5.54

Earnings Date

May 8, 2017 - May 12, 2017

Dividend & Yield

1.56 (1.40%)

Ex-Dividend Date

N/A

1y Target Est

117.08

STATISTICS

Valuation Measures

Market Cap (intraday) 5	176.72B
Enterprise Value 3	193.47B
Trailing P/E	20.17
Forward P/E 1	16.61
PEG Ratio (5 yr expected) 1	1.98
Price/Sales (ttm)	3.20
Price/Book (mrq)	4.14
Enterprise Value/Revenue 3	3.51
Enterprise Value/EBITDA 6	11.53

Financial Highlights

Fiscal Year

Fiscal Year Ends	Oct 1, 2016
Most Recent Quarter (mrq)	Dec 31, 2016

Profitability

Profit Margin	16.29%
Operating Margin (ttm)	25.70%

Management Effectiveness

Return on Assets (ttm)	9.75%
Return on Equity (ttm)	19.65%

Income Statement

Revenue (ttm)	55.17B
Revenue Per Share (ttm)	34.19
Quarterly Revenue Growth (yoy)	-3.00%
Gross Profit (ttm)	25.64B
EBITDA	16.78B
Net Income Avi to Common (ttm)	8.99B
Diluted EPS (ttm)	5.54
Quarterly Earnings Growth (yoy)	-13.90%

Balance Sheet

Total Cash (mrq)	3.74B
Total Cash Per Share (mrq)	2.36
Total Debt (mrq)	20.49B
Total Debt/Equity (mrq)	43.43
Current Ratio (mrq)	0.86
Book Value Per Share (mrq)	27.01

Cash Flow Statement

Operating Cash Flow (ttm)	12.02B
Levered Free Cash Flow (ttm)	8.5B

Trading Information

Stock Price History

Beta	1.33
52-Week Change 3	13.46%
S&P500 52-Week Change 3	16.07%
52 Week High 3	112.89
52 Week Low 3	90.32
50-Day Moving Average 3	110.53
200-Day Moving Average 3	101.44

Share Statistics

Avg Vol (3 month) 3	6.56M
Avg Vol (10 day) 3	5.88M
Shares Outstanding 5	1.58B
Float	1.51B
% Held by Insiders 1	7.82%
% Held by Institutions 1	63.30%
Shares Short 3	15.67M
Short Ratio 3	2.16
Short % of Float 3	0.99%
Shares Short (prior month) 3	15.14M

Dividends & Splits

Forward Annual Dividend Rate 4	1.56
Forward Annual Dividend Yield 4	1.40%
Trailing Annual Dividend Rate 3	1.49
Trailing Annual Dividend Yield 3	1.33%
5 Year Average Dividend Yield 4	1.26
Payout Ratio 4	26.85%
Dividend Date 3	Jan 11, 2017
Ex-Dividend Date 4	Dec 8, 2016
Last Split Factor (new per old) 2	1014/1000
Last Split Date 3	Jun 13, 2007

Balance Sheet

All numbers in thousands

Period Ending	10/1/2016	10/3/2015	9/27/2014
Current Assets
Cash And Cash Equivalents	4,610,000	4,269,000	3,421,000
Short Term Investments	-	-	-
Net Receivables	9,065,000	8,786,000	8,319,000
Inventory	1,390,000	1,571,000	1,574,000
Other Current Assets	1,901,000	2,132,000	1,855,000
Total Current Assets	16,966,000	16,758,000	15,169,000
Long Term Investments	4,280,000	2,643,000	2,696,000
Property Plant and Equipment	27,349,000	25,179,000	23,332,000
Goodwill	27,810,000	27,826,000	27,881,000
Intangible Assets	6,949,000	7,172,000	7,434,000
Accumulated Amortization	-	-	-
Other Assets	8,679,000	8,604,000	7,629,000
Deferred Long Term Asset Charges	-	-	-
Total Assets	92,033,000	88,182,000	84,141,000
Current Liabilities
Accounts Payable	9,130,000	7,844,000	7,595,000
Short/Current Long Term Debt	3,687,000	4,563,000	2,164,000
Other Current Liabilities	4,025,000	3,927,000	3,533,000
Total Current Liabilities	16,842,000	16,334,000	13,292,000
Long Term Debt	16,483,000	12,773,000	12,631,000
Other Liabilities	7,706,000	6,369,000	5,942,000
Deferred Long Term Liability Charges	3,679,000	4,051,000	4,098,000
Minority Interest	4,058,000	4,130,000	3,220,000
Negative Goodwill	-	-	-
Total Liabilities	48,768,000	43,657,000	39,183,000
Stockholders' Equity
Misc. Stocks Options Warrants	-	-	-
Redeemable Preferred Stock	-	-	-
Preferred Stock	-	-	-
Common Stock	35,859,000	35,122,000	34,301,000
Retained Earnings	66,088,000	59,028,000	53,734,000
Treasury Stock	-54,703,000	-47,204,000	-41,109,000
Capital Surplus	-	-	-
Other Stockholder Equity	-3,979,000	-2,421,000	-1,968,000
Total Stockholder Equity	43,265,000	44,525,000	44,958,000
Net Tangible Assets	8,506,000	9,527,000	9,643,000