The Walt Disney Company

DCF against the market -16.1% (tolerance 15.0%). the core operating margin at the horizon (Analysis / Core operating profit / Core operating margin, driven by the cost of services and selling and administrative ratios): About 16 per cent below the market: the model takes the core operating margin from 15.3 per cent in FY2026 to about 17.3 per cent by FY2028 on the announced cost reductions and streaming margins, and holds it there. A core margin near 20 per cent at the horizon, about 15 per cent higher, lifting NOPAT and the continuing value in proportion, or a WACC near 7.4 per cent (the market-implied WACC) against the model's 8.33, closes the gap. The market prices in residual operating income growing about 5.5 per cent a year after FY2031, against the model's 3.8; revenue grew 2.8 to 7.5 per cent a year i

Residual income against the market -15.9% (tolerance 15.0%). the steady state after FY2031: the horizon's residual operating income growing at the 3.8 per cent long-run nominal GDP growth (Valuation / Market inputs / Long-run nominal GDP growth), on the horizon: About 16 per cent below the market: the continuing value lets the horizon's residual operating income (about 3.1 billion in FY2031) grow at the 3.8 per cent GDP rate, where the market's enterprise value implies about 5.5 per cent. A core margin near 20 per cent at the horizon, which roughly doubles the residual operating income, or a WACC near 7.4 per cent closes the gap; revenue grew 2.8 to 7.5 per cent a year in FY2023 to FY2026 and ROIC ran 4.3 to 7.5 per cent in FY2022 to FY2025.