Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.9 |
| P/S | 9.1 |
| EV/EBITDA | 5.2 |
| Fwd P/E | 8.2 |
| PEG | 3.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 14.4x
- ▸PEG: 2.65
DIS · Why this verdict
Why Walt Disney Company (The) (DIS) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Walt Disney has executed flawlessly on earnings for four consecutive quarters and trades roughly 15% below the analyst-derived target with a 3.7-to-1 risk/reward ratio, but a confirmed price downtrend, a legal risk overhang that elevated the caution level from sell to hold, and free cash flow converting at only 33% of net income argue for patience rather than adding at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow converts at only 33% of net income — a significant shortfall flagged as a quality red flag — raising questions about the durability of reported earnings and limiting the company's capacity to self-fund distributions, buybacks, or content investment without external capital. Quality breakdown | Free cash flow rises above 70% of net income for 2 consecutive quarters. | →Stable |
| CounterLarge entertainment businesses often report below-full-conversion free cash flow due to content-capitalization timing; conversion could rebound meaningfully without any underlying operational change. | ||
The company has beaten consensus earnings estimates in each of the last four quarters, including a most-recent beat of roughly 5% — a streak that reflects sustained execution even as revenue growth has remained subdued. Earnings | Earnings per share beats consensus in at least 3 of the next 4 reported quarters. | →Stable |
| CounterBeat streaks at modest margins of 3-11% may reflect conservative guidance setting rather than genuine demand acceleration; weak top-line growth makes a meaningful earnings miss more likely once guidance discipline fades. | ||
The stock trades below its 200-day moving average with that average declining at roughly 2% over the past month — a confirmed downtrend signaling sellers are in control and that near-term recoveries may face meaningful technical resistance. Momentum breakdown | Price closes above the 200-day moving average and holds that level for 10 or more consecutive trading sessions. | ↓Deteriorating |
| CounterRising on-balance volume suggests buyers are stepping in at current levels; the downtrend could reverse quickly if a business catalyst or improved market sentiment materializes. | ||
An active legal matter has triggered the news risk gate — flagging one risk and one concern — and has elevated the positioning stance from sell to hold for existing holders, adding headline uncertainty to an already cautious technical setup. Warnings | Flagged legal matter reaches formal resolution within 2 quarters with no further legal risk flags triggered. | →Stable |
| CounterLegal flags in large media companies frequently resolve at costs immaterial to the enterprise; the headline risk may already be reflected in the current discount to analyst targets. | ||
Analyst consensus points to roughly 28% upside from the current price, and the stock trades about 15% below the technical resistance target with a risk/reward of approximately 3.7-to-1 in favor of upside — a favorable setup for patient holders who can tolerate near-term technical pressure. Price targets | Price advances to within 3% of the $116.70 analyst-derived target within 12 months. | →Stable |
| CounterA favorable risk/reward ratio can persist for extended periods if the downtrend continues; near-term losses could prevent a position from ever approaching the target if the technical setup deteriorates further. | ||
Free cash flow converts at only 33% of net income — a significant shortfall flagged as a quality red flag — raising questions about the durability of reported earnings and limiting the company's capacity to self-fund distributions, buybacks, or content investment without external capital.
→StableQuality breakdown
- Expectation
- Free cash flow rises above 70% of net income for 2 consecutive quarters.
CounterLarge entertainment businesses often report below-full-conversion free cash flow due to content-capitalization timing; conversion could rebound meaningfully without any underlying operational change.
The company has beaten consensus earnings estimates in each of the last four quarters, including a most-recent beat of roughly 5% — a streak that reflects sustained execution even as revenue growth has remained subdued.
→StableEarnings
- Expectation
- Earnings per share beats consensus in at least 3 of the next 4 reported quarters.
CounterBeat streaks at modest margins of 3-11% may reflect conservative guidance setting rather than genuine demand acceleration; weak top-line growth makes a meaningful earnings miss more likely once guidance discipline fades.
The stock trades below its 200-day moving average with that average declining at roughly 2% over the past month — a confirmed downtrend signaling sellers are in control and that near-term recoveries may face meaningful technical resistance.
↓DeterioratingMomentum breakdown
- Expectation
- Price closes above the 200-day moving average and holds that level for 10 or more consecutive trading sessions.
CounterRising on-balance volume suggests buyers are stepping in at current levels; the downtrend could reverse quickly if a business catalyst or improved market sentiment materializes.
An active legal matter has triggered the news risk gate — flagging one risk and one concern — and has elevated the positioning stance from sell to hold for existing holders, adding headline uncertainty to an already cautious technical setup.
→StableWarnings
- Expectation
- Flagged legal matter reaches formal resolution within 2 quarters with no further legal risk flags triggered.
CounterLegal flags in large media companies frequently resolve at costs immaterial to the enterprise; the headline risk may already be reflected in the current discount to analyst targets.
Analyst consensus points to roughly 28% upside from the current price, and the stock trades about 15% below the technical resistance target with a risk/reward of approximately 3.7-to-1 in favor of upside — a favorable setup for patient holders who can tolerate near-term technical pressure.
→StablePrice targets
- Expectation
- Price advances to within 3% of the $116.70 analyst-derived target within 12 months.
CounterA favorable risk/reward ratio can persist for extended periods if the downtrend continues; near-term losses could prevent a position from ever approaching the target if the technical setup deteriorates further.
Per-dimension breakdown
Quality
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.7 |
| ROA | 3.2 |
| Gross margin | 3.5 |
| Op margin | 7.7 |
| Net margin | 4.3 |
| Current ratio | 2.8 |
| FCF quality | 4.4 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 57% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
2.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
| EPS growth | 0.0 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 1.4 |
- ▸Overbought (RSI 76)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 76 (late-cycle distribution risk)
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 9.0 |
| Price target | 7.6 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
6.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 6.9 |
| growth rank | 3.2 |
Technical
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 0.2 |
| 52w position | 7.6 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.4 |
| days to cover | 9.1 |
| volatility | 7.2 |
| put call | 3.4 |
| implied vol | 8.3 |
| max pain risk | 7.0 |
| beta | 5.4 |
| debt equity | 8.4 |
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.0 |
| dividend safety | 7.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend aristocrat: 1.4% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:88d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.7<1.5@spot
Warning (1)
- DEATH_CROSS:momentum=6.6>=5.0 recovering
Reward-to-Risk
0.74
Upside
+10.0%
Downside
13.4%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 76
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.40>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.7<1.5@spot) reinforce the read. Current asymmetry R:R is 0.74 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.3, Risk (lower is worse) at 7.3, and Catalyst at 6.8; the weakest are Growth at 2.1, Technical at 2.8, and Quality at 4.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.74 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Four Quarter Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Confirmed Price Downtrend
Trip ifPrice closes above the 200-day moving average and holds for 10 or more consecutive trading sessions.
- P3Legal Risk Overhang
Trip ifFlagged legal matter reaches formal resolution within 2 quarters with no additional legal risk flags triggered.
- P4Weak Free Cash Conversion
Trip ifFree cash flow rises above 70% of net income for 2 consecutive quarters.
- P5Analyst Conviction Upside
Trip ifPrice advances to within 3% of $116.70, reducing remaining upside headroom to less than 3%.