Expansion of Disney's Parks Should Drive Revenue

| About: The Walt (DIS)

Disney’s (NYSE:DIS) recent year-on-year increase in quarterly revenues can be attributed in part to higher attendance at its parks and resorts. We estimate that around 15% of the $36.73 Trefis price estimate for Disney’s stock comes from its parks and resorts business. Disney is setting itself up for even more attendance (and revenue) growth at its parks by investing in expansion projects.

Expansion of Parks to Attract More Visitors

Disney is expanding its Magic Kingdom parks at Disney World in the US and Disneyland in Hong Kong. Though the capital requirement in the immediate future will slightly increase because of the expansion, we expect that the expansion projects will help Disney to increase the number of guests at its parks.

The overall state of the economy also has an impact on park attendance. With the economy slowly improving, Disney is seeing an improvement in its park attendance with domestic attendance up by 9% in the past quarter.

We expect the economic recovery to continue boosting attendance at parks in the near term while Disney’s park expansion projects drive attendance increases over the long-run.

We expect the number of guests at Disney’s US Parks and Resorts to reach about 73 million and the number of guests at International Parks and Resorts to reach about 48 million by the end of Trefis forecast period.

You can modify the forecasts here to see how fluctuations in the number of guests will impact Disney’s stock value.

For additional analysis and forecasts, here is our complete model for Disney’s stock.

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