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Disney Stock Analysis - Credit Suisse

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Credit Suisse
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CLARITY IS CONFIDENCE HOLT 1 DISNEY (WALT) CO (DIS) Risk Probability of Default 0% Average Credit Rating A Accounting Quality Above Average Momentum 6m 3m 1m CFROI Revisions -0.23 0.00 0.05 Price Change % 11.85 11.42 1.36 Valuation Price USD 56.36 downside -11% Warranted Price 50.09 Dividend Yield 1.3% Relative Wealth Chart Current 20.9 Regional Industry 17.6 Low 13.6 Median 19.6 High 24.3 Economic PE Ratio 5 year observed range Summary Movies & Entertainment Market Cap: 101.448 USD Media, US-Americas
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Page 1: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT1

DISNEY (WALT) CO (DIS)

Risk

Probability of Default 0%

Average Credit Rating A

Accounting Quality Above Average

Momentum

6m 3m 1m

CFROI Revisions -0.23 0.00 0.05

Price Change % 11.85 11.42 1.36

Valuation

Price USD 56.36 downside

-11% Warranted Price 50.09

Dividend Yield 1.3%

Relative Wealth Chart

Current 20.9

Regional Industry 17.6

Low13.6

Median19.6

High24.3

Economic PE Ratio 5 year observed range

Summary Movies & Entertainment Market Cap: 101.448 USD

Media, US-Americas

Page 2: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT2

DISNEY (WALT) CO

Relative Wealth Chart Movies & Entertainment Price: 56.36 (Mar 6, 2013) Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

Page 3: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT3

DISNEY (WALT) CO

Sales, Margins & Turns Movies & Entertainment Price: 56.36 (Mar 6, 2013)

Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

Page 4: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT4

DISNEY (WALT) CO

HOLT Warranted Upside/Downside

Economic PE

HOLT Price to Book (Value Cost Ratio)

Valuation Movies & Entertainment Price: 56.36 (Mar 6, 2013)

Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

DISNEY (WALT) CO Media

HOLT Warranted Price

Price

DISNEY (WALT) CO Media

Page 5: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT5

DISNEY (WALT) CO

Valuation-Expectations Movies & Entertainment Price: 56.36 (Mar 6, 2013)

Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

Historical Expectations

Spread:Market Implied CFROI vs. T+1 Forecast CFROI

Market Implied CFROI

T+1 Forecast CFROI T+5 HOLT Forecast CFROI

Page 6: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT6

DISNEY (WALT) CO

Market vs HOLT Warranted Price

Warranted % Change

High 60.21 7

Best 50.09 -11

Low 43.22 -23

Statistics

Deviation 7% Very Good

Bias -18%

Valuation-Price Tracking Movies & Entertainment Price: 56.36 (Mar 6, 2013)

Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

Page 7: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT7

DISNEY (WALT) CO

4 Above Average 2 Below Average 5 Good 4 Above Average 3 Average

Accounting Quality

Risk Movies & Entertainment Price: 56.36 (Mar 6, 2013)

Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

Risk of Default

DISSector Peers

(Median)

Credit Peers

(Median)

Probability of Default(%) 0 4 0

Average Credit Rating A BB- A

5 Year CDS 26 224 54

Credit Metrics

DISSector Peers

(Median)

Credit Peers

(Median)

Traditional Leverage(%) 15 17 14

HOLT Leverage(%) 23 36 22

Interest Coverage FY1 8.4 3.1 9.1

HOLT Fixed Charge Ratio FY1 2.0 1.4 1.6

Page 8: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT8

DISNEY (WALT) CO

Price Momentum

18 mth 1 yr 6 mth 1 mth 1 wk

Absolute 70.46 30.62 11.85 1.36 1.99

Rel. To Peers -2.39 -5.58 -7.48 -0.92 0.25

EPS Estimates From 29 Estimates

2013 Growth % 2014 Growth %

High 3.66 15.5 4.12 12.6

Consensus 3.43 8.2 3.89 13.6

Low 3.37 6.3 3.70 9.8

CFROI Revisions

6 mth 3 mth 1 mth 1 wk

CFROI Revisions -0.23 0.00 0.05 0.00

As % of CFROI -1.90 0.00 0.42 0.00

Average of Peers -0.23 -0.15 -0.15 -0.02

Weekly Price (18 Month)

CFROI Revisions (18 Month)

Momentum Movies & Entertainment Price: 56.36 (Mar 6, 2013)

Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

Media, US-Americas

Media, US-Americas

Earnings Surprises

Q3 2012 Q4 2012 Q1 2013

EPS Surprise 9.78 -1.45 2.60

Cash Flow Surprise

6.46 -0.86 1.61

1 Month CFROI Revisions 3 Month CFROI Revisions

Page 9: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT9

DISNEY (WALT) CO

Sensitivity Movies & Entertainment Price: 56.36 (Mar 6, 2013) Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

2010 2011 2012 t + 1 t + 5 t + 10

CFROI % 10.14 10.44 11.43 12.22 11.87 11.44

Real Asset Growth % 1.53 8.49 4.69 3.53 2.50 2.50

Discount Rate 4.91 6.08 5.49 5.02

CFROI & Asset Growth Inputs

Warranted Valuation Amount (MM) Per Share

+ PV Cash Flow Existing Assets 95,102 52.83

+ NPV Cash Flow Future Investments 29,773 16.54

+ Market Value Investments 2,440 1.36

Total Economic Value 127,315 70.73

- Market Value of Debt & Equivalents 31,945 17.75

- Market Value of Minority Interest 5,206 2.89

Warranted Equity Value 90,164 50.09

Shares Outstanding 1,800 downside

-11%

Page 10: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT10

DISNEY (WALT) CO

Estimator Movies & Entertainment Price: 56.36 (Mar 6, 2013) Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Sales Growth % 3.39

EBITDA % 25.66

Asset Turns 0.56

CFROI % 11.43

Real Asset Growth % 4.69

Discount Rate 5.49 5.02

Sales, Margins & Turns Inputs

Warranted Valuation Amount (MM) Per Share

+ PV Cash Flow Existing Assets 95,102 52.83

+ NPV Cash Flow Future Investments 29,773 16.54

+ Market Value Investments 2,440 1.36

Total Economic Value 127,315 70.73

- Market Value of Debt & Equivalents 32,805 18.22

- Market Value of Minority Interest 5,206 2.89

Partial Year Adjustment 0 0

Warranted Equity Value 90,164 50.09

Shares Outstanding 1,800 downside

-11%

Page 11: Disney Stock Analysis - Credit Suisse

CLARITY IS CONFIDENCE HOLT11

DISNEY (WALT) CO

Burbank, CA 91521

818-560-1000

The Walt Disney Company operates as an entertainment company worldwide. Its Media Networks segment engages in broadcast television network,

television production and distribution, television stations, broadcast radio networks and

stations, and publishing and digital operations. This segment operates the ABC

Television Network and 8 owned television stations, the ESPN Radio Network and Radio Disney Network, and 35 owned and operated radio stations. It also

produces, licenses, and distributes live-action and animated television programming;

and operates ABC-, ESPN-, ABC Family-, and SOAPnet-branded Internet businesses. The

company's Parks and Resorts segment owns and operates the Walt Disney World Resort in Florida that includes theme parks; resort hotels; a retail,

dining, and entertainment complex; a sports complex; conference centers; campgrounds; water parks; and other recreational facilities, as well as the Disneyland Resort

in California. This segment also manages and markets the Disney Vacation Club, Disney Cruise Line, Adventures by Disney, and mixed-use Disney Resort and

Spa in Hawaii; manages Disneyland Paris and Hong Kong Disneyland Resort; and

licenses the operations of Tokyo Disneyland Resort. Its Studio Entertainment segment

produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings, and live stage plays. The company's

Consumer Products segment licenses trade names, characters, and visual and literary

properties to retailers, show promoters, and publishers; operates The Disney Store

and DisneyStore.com; publishes children's books and magazines, and comic books; and operates English language learning centers. Its Interactive

segment creates and delivers entertainment and lifestyle content across interactive media

platforms, including online, mobile, and video game consoles; and provides mobile

phone service and content to consumers. The company was founded in 1923 and is based in Burbank, California.

Walt Disney Co (The.

500 South Buena Vista Street

Business Segment Sales Geographic Segment Sales

Company Description Movies & Entertainment Price: 56.36 (Mar 6, 2013)

Market Cap: 101.448 USD Warranted Price: 50.09 USD (-11%)


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