Cramer's Morning Take: Disney 11/9/23

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Jim Cramer (0:28)

I'm Jim Cramer, and you're about to hear a sample taken directly from today's CNBC Investing Club morning meeting. We're now done with earnings. I want to call it a consolidation day and another, let's say, challenge to people that interest rates are only going to go down. They're not.

Interest rates can go up, and this is a day that is one of those days where you just say, okay, let's pick among what we want to buy. And I come back and say, in your excellent write-up, even Disney up three, now we got to know, as you said to me earlier this morning, Disney tends to go open up and then go down through the day. Unfortunately, we've seen that.

We've seen it too many times.

Jeff Marks (1:07)

But this is actually higher than the open, so it's a good sign. So that's sort of strengthening.

Jim Cramer (1:11)

But why don't you go through Disney one for one because I think it was such a great write-up you did last night.

Jeff Marks (1:16)

Thank you. Yeah, I mean, look, there were a lot of good things here. Of course, they increased their cost reduction plan to $7.5 billion from $5.5 billion. Very good to see.

Some of that is cash content savings, but also SG&A and other expenses.

Most importantly, the free cash flow guidance. They're calling for $8 billion in fiscal year 24 That's well above estimates. Up from $4.9 billion this past fiscal year, $14 billion operating cash flow. It hasn't been that high since 2018 And if we were to expand this chart, I mean, Disney was $110 stock in 2018

Jim Cramer (1:50)

Oh my, it was great stuff.

Jeff Marks (1:51)

I'm not saying Disney's gonna go right back to that level because it's the same amount of cash flow off now a larger revenue base, but at least it signs that progress is being made in Iger's plan here. And look, there's been, we've called out progress for a couple quarters, but at least a little bit more concrete here because we have been concerned about cash flow, the balance sheet. They are talking about bringing a dividend back by the end of the calendar year.

Jim Cramer (2:19)

And maybe even a buyback.

Jeff Marks (2:20)

Potentially, sure, as long as cash flow keeps growing.

DTC losses narrowing. They added seven million core Disney subscribers, talking about synergies as well of integrating Hulu with Disney Plus, creating this one app experience, pushing more price increases too, pushing more people to the ad tier as well, which is a higher ARPU. And ESPN, up revenue, up operating income. Park's still doing well.

Jim Cramer (2:49)

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