Posted 12/27/2023, 11:39:16 AM
Disney's High Valuation Justified by Expected Earnings Growth, Analysts Say
- The Walt Disney Company (DIS) has a high P/E ratio of 70.7x compared to the market average below 16x, which may indicate it is overvalued
- Disney's earnings have declined faster than most other companies lately, but analysts expect earnings to recover substantially in the next 3 years
- Analysts forecast Disney's earnings to grow 65% per year over the next 3 years, much faster than the market's 13%
- Disney's higher expected growth helps justify its high P/E ratio, as shareholders are confident in its future prospects
- Despite risks, analysts remain optimistic about Disney's earnings outlook and don't expect shareholders to sell off shares