Disney:The stock may have seen its worst yet,here are some suggestions for practical.

1.The quarterly FCF chart is not exactly a model for consistency.

the range between the best quarter (March 2019) and the worst quarter (June 2019) being a staggering $5.25 billion.

2.The annual FCF chart shows the steep drop in Disney's FCF, with the recent high in 2020 being about 1/3rd of the level in 2018.

The FCF situation is exacerbated when you consider:

3.The company's cost-cutting and price-increasing efforts have not made too much of an impact yet.

4.The company is entertaining thoughts of reinstating its dividend. Consider the following data points:

At 1.80 billion shares and 88 cents semiannually, Disney needs to set aside nearly $1.58 billion semiannually for its dividend payment. That is, about $800 million per quarter, which is nearly 30% higher than the company's average FCF over the last 5 years.

Disney incurred $969 million in interest expense in H1 2023, which is 32% higher than the $735 million it had to pay in H1 2022.

Clearly, this is not an enviable position to be in when interest rates are showing no signs of slowing down.

Just as Disney was in the news for all the wrong reasons, Disney+ stopped its upward trajectory and reversed. And at the exact same time, Netflix, Inc. (NFLX) broke out of its flat-lining trajectory to resume its own upward trajectory. With the number of streaming options growing by the day, price increases may not be the right way to reverse this trend.

Many investors feel that Bob Iger’s magic may have worn off.

At some point, Disney's stock will turn around. It is not a question of "if" but "when".

The stock is not ready for a turnaround yet until we start seeing signs that the company has turned around.