Walt DisneyMr.Miss(
DIS) Theme parks are booming again after a long period of stagnation due to the pandemic.But the company is still betting that post-coronavirus growth can be reinvigorated by a new return to the old management team.
X
The company narrowly met Wall Street’s targets for revenue and Disney+ subscribers in the second quarter of the fiscal year.The stock has been sluggish since the coronavirus pandemic ousted its former CEO and sparked a political standoff with Florida, but it’s looking to stabilize.Florida is home to Disney’s largest theme park complex.
Since the beginning of 2020, the stock market has plunged as the coronavirus crash has left Wall Street in turmoil.
Disney shares plunged as the Dow Jones index firm closed theme parks and suspended departures for Disney Cruise Line.Disney shares are up just 5% this year, lagging behind the Dow Jones Industrial Average.
Dow Jones Disney Stock Shift
While theme parks and cruise businesses took a hit, entertainment giants thrived with streaming service Disney+.And with the gradual reopening of movie theaters, the prospects for box office earnings are also rising.However, you need to find a balance between streaming revenue and in-person revenue.
Disney’s content acquisitions are also sluggish.Last year, Disney films earned him 22 Oscar nominations.
This includes Banshees of Inishelin, Black Panther: Wakanda Forever, and Avatar: The Way of Water.But theatrical releases continue to struggle.
Is Disney stock a buy now? Read on to find out.
New CEO at the helm
After an impressive 2010 run, former CEO Bob Iger took over from Bob Chapek in November 2022.Mr.Iger said he would stay on for another three years, and he promised to find a successor this time.
During Mr.Iger’s first 14-plus years in office, Disney stock rose more than 400%, or about 12% on an annualized basis.
He revamped theme parks, incorporated Star Wars, Marvel and Pixar into the company’s cinematic universe, and launched Disney+.
It’s been a tough road for Mr.Chapek, who couldn’t survive the huge investment needed to keep people subscribed to Disney+, in addition to reopening parks and cruises.And he has a headache to deal with in Florida.
Disney+ continues to grow
Disney reported lower-than-expected second-quarter earnings as Disney+ streaming subscriptions faltered after the May 10 trading close.The company posted adjusted earnings of $21.8 billion at 93 cents per share.That compares with S&P Global Market Intelligence’s forecast of $21.8 billion at $0.93.
Disney+ lost 2% of its subscribers to a total of 157.8 million and saw fewer views.
Streaming services have become a key revenue driver during the pandemic, as COVID-19 restrictions keep people at home.
Analysts now expect the stock to hit 124.82 in the next 12 months, after a year-long slump.This is his potential uplift of over 30%.
Meanwhile, theme park revenues have recovered.Second-quarter Disney Parks, Experiences and Products segment sales increased 17% to $7.8 billion.However, losses in the streaming business continue to negatively affect the business.
It is expected to become profitable in 2024.
humble beginnings
It’s hard to believe that the $172 billion market cap corporation started in 1923 as Disney Brothers Cartoon Studios by Walt and his brother Roy O.Disney.Highlights along the way include Disney’s first sound film, Steamboat Willie, in 1928, the first animated feature film, Snow White and the Seven Dwarfs, in 1937, and television in 1950..
In 1955, Walt’s theme park became Disneyland in Anaheim.His second location in Orlando, Florida was announced in 1965.
Walt died the following year and Roy took over.Walt Disney World opened in 1971, two months before Roy’s death.
However, the company continued to grow.
Disney Stock Fundamentals and Earnings
IBD inventory diagnosis assigns Disney an overall rating of 32.It combines key foundational and technical indicators into one score for him.Based on this assessment, the media giant ranks 12th in the Media Diversified Group of 20 stocks.
The earnings per share rating of 28 reflects three-year earnings growth of 20%.This includes his 65% decline in FY20 and his 13% increase in FY21.2022 EPS increased by 54%.
Analysts now expect EPS to grow 13.9% in the fiscal year ending September 2023, and 33% in FY24, according to S&P Global Market Intelligence.The company will announce its third quarter results in August.
Is Disney Stock a Buy?
After breaking out of its flat base and hitting a record high in November 2019, Disney stock has fallen more than 40% in the coronavirus market crash.It bottomed out on March 18, 2020 and is back at highs again.But now he’s trying to find that footing.
Since then, Disney has cleared several buy points heading into March 8, 2021.
In the months since, the stock has fallen below its 50-day moving average.
The stock is now down more than 26% from its 52-week high, according to chart analysis from IBD Marketsmith.
The relative strength line, which compares the stock’s performance to the S&P 500, continues to fall sharply and fails to find a sure bottom.The recent rise has slowed.
Disney isn’t something to buy right now.
First, we need to show significant improvement.But now that theme parks, cruises and movie theaters have reopened, it will be interesting to see how the media giant fares.Wait for the stock to break above the 200-day moving average of 100.99 before getting too bullish.
And don’t forget to keep an eye on market trends.We recommend waiting until the market enters a solid uptrend.This means that investors can purchase major stocks at appropriate buy points.For an in-depth, daily analysis of what’s happening in the stock market, read “The Big Picture.”
Follow Matt Krantz
Twitter @mattkrantz
You’ll probably also like:
See the best stocks to buy and watch
View breakout stocks and technical analysis
Get Your Free IBD Newsletter: Market Readiness | Tech Reports | How To Invest
Catch Your Next Big Win With MarketSmith
#buy #Disney #stock #war #Florida
Credit.
