Disney Stock Rises Amid Bob Iger’s Moves to Defang Activist Investors
I wouldn’t expect to sell the shares and make a great gain right away. Instead, I would hold on for the long term to benefit from the company’s recovery and what should be a new phase of growth down the road. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. 22 Wall Street equities research analysts have issued «buy,» «hold,» and «sell» ratings for Walt Disney in the last year.
- Disney faces potential challenges when adapting to the evolving media landscape, with increasing pay-TV rates possibly leading to subscription cancellations or reductions.
- Toys, clothes, and other merchandise sales, licensing deals, and content to lure customers to the company’s streaming services and theme parks are just some of the ways Disney capitalizes on the potent appeal of its brands.
- However, in so doing, it has forgotten that a lot of the hype around the original Star Wars trilogy was fueled by fans having to wait years for the next instalment.
- Basic pay-TV service rates have continued to increase, which could cause consumers to cancel their subscriptions or reduce their level of service.
This segment also provides a wide range of licensed and branded themed products based on each of its many franchises. ESPN garners the highest affiliate fees of any basic cable channel, and a decrease in pay TV penetration would slow revenue growth. The cost of sports rights may continue to skyrocket, putting pressure on margins. “Disney is officially back on offense with the profit and loss humming and confident guidance,” Cahall wrote. He cited Disney’s “flattish expense growth” for FY24, which reflects Iger’s plan to meet or exceed $7.5 billion in annualized cost savings. “With this done and Sports/Experiences steady, we think [management] attention remains on creative,” according to Cahall.
Many Disney parks and resorts around the world are open and serving customers following a number of closures throughout the early part of the COVID-19 pandemic. Face masks are strongly recommended for all indoor settings and required for all guests ages coca cola trade 2 and up on Disney shuttles and at first aid stations. The advance registration system is new and allows visitors to book reservations up to several months in advance. Today, Disney shares are trading for about 22 times forward-earnings estimates.
Key Morningstar Metrics for Disney
Perhaps more than the actual quarterly results themselves, which showed improvements in cost containment, investors were responding to a flood of longer-term strategic announcements from Disney. Discovery to create a sports-centric streaming bundle, targeted for fall 2024 launch, as well as plans to debut a stand-alone streaming version of ESPN as early as August 2025. We assign Disney a wide economic moat due to its strong pricing power in the media networks segment and branded businesses. The 2019 addition of entertainment assets from 20th Century Fox is expected to help the company generate excess returns on capital despite the competitive media and streaming landscape.
That’s why Iger noted the company’s businesses that «will drive the greatest growth and value creation over the next 5 years … are inextricably linked to our brands and franchises.» These revisions reflect varying levels of optimism and confidence in the stock’s future performance, indicating positive sentiments among analysts regarding its potential growth and value. We saw this movie last year and we didn’t like the ending,” the hedge fund’s Restore the Magic account grumbled in a post on X. To be sure, Disney’s shares are still off their 52-week high of $118.18 — and significantly down from the all-time high of more than $189/share in February 2021. The results show stable revenue and effective cost management, according to Ben Barringer, technology analyst at investment manager Quilter Cheviot.
Putting Disney’s stock price in the $15 territory, a long way from a previous all time stock price high around $43. Moreover, the division’s fiscal Q3 operating income of $2.4 billion was more than double the $1.1 billion produced by its film and television arm, grouped under its Disney Media and Entertainment Distribution division. After three quarters, the Disney Parks, Experiences and Products segment produced $7.6 billion in profits compared to the Media and Entertainment Distribution division’s $2.2 billion, showcasing the importance of these additional revenue streams. Disney’s earnings per share for the first quarter came in at $1.22 adjusted, versus a forecast of 99 cents, despite revenue missing estimates and remaining roughly flat year on year.
Each new franchise deepens the Disney library, which should continue to generate value over the years. The media network component also includes the Disney Channel, one of two dominant cable networks for children, which allows the firm to introduce and extend its strong content portfolio. With its 2019 purchase of the Fox entertainment assets, Disney enhanced its pay TV lineup by adding multiple channels with strong appeal to adults. FX and FXX are homes for critically acclaimed original scripted shows. All this content now finds its way onto Disney+ or Hulu, strengthening those platforms’ competitive positions in the streaming landscape. Walt Disney Co. reported Q1 profit that fell substantially short of analysts’ expectations which sent the stock price to a 10% decline in after-hours trading.
The company operates through two segments; Disney Media and Entertainment Distribution and Disney Parks, Experiences, and Products creating long-lasting memories for children of all ages. In total, the company has earned 135 Oscars including 32 awarded directly to Walt himself and is said to have created many of the most loved and enduring films of all time as well as revolutionizing the theme park industry. Disney shares were up more than 9% in early trading Thursday, to over $108 per share, coming after the Mouse House topped Wall Street earnings expectations for the year-end 2023 quarter (while top-line revenue was slightly below targets). The stock climbed as much as 13.7% during the session before closing up 11.5% to $110.53, boosting Disney’s market cap by more than $21 billion (to nearly $203 billion).
Is Disney Stock a Good Long-Term Investment?
The company has moved beyond the historical view of a brand that children recognize and parents trust by acquiring and creating new franchises and intellectual property. Recent successes with Pixar and Marvel have helped create new opportunities for adults who may have outgrown their attraction to the company’s traditional characters. The 2012 acquisition of Lucasfilm added another avenue to engage with children and adults. Disney uses the success of its filmed entertainment not only to drive Disney+ subscriptions, but also to create new experiences at its parks and resorts, merchandising, TV programming, and even Broadway shows.
The company beat earnings-per-share estimates in four of the past six quarters. Walt Disney DIS
appears likely to bottom out at or just above its monthly value level for July at $85.02. The stock is below a death cross on its daily chart with its 50-day and 200-day simple moving averages at $92.11 and $96.79. The weekly chart shows Disney oversold and a weekly close above its five-week modified moving average at $90.89 would be a positive.
Disney shares notch best day in more than three years after earnings bonanza
We project that merchandise, food, and beverage revenue will see similar growth, as will resorts revenue. The parks and consumer segment suffered a 37% decline in revenue in fiscal 2020 and a 3% decline in fiscal 2021. Following a strong bounce back of 73% in 2022, we expect more normalized growth of 5% over the next five years. The company’s ad-supported broadcast networks, along with its theme parks and consumer products, will suffer if the economy weakens. We expect fiscal 2023 admissions revenue will remain ahead of fiscal 2019, despite consumer worries about the economy and inflation. Disputes with cable company Charter Communications and the state of Florida rage on while a pair of industry strikes from writers and actors put a halt on the creation of new content.
There are currently 1 sell rating, 3 hold ratings and 18 buy ratings for the stock. The consensus among Wall Street equities research analysts is that investors should «moderate buy» DIS shares. Making movies is a hit-or-miss business, which could result in big swings in profitability for the filmed entertainment segment.
Disney Has ‘Turned the Corner’ After a Strong Quarter, Iger Says
Reedy Creek covers 40 squares miles, maintains 134 miles of roads and handles 60,000 tons of waste annually. Republican legislators who passed a bill repealing the district effective June 1, 2023 said details of the change would be worked out and legislated over the https://g-markets.net/ next year. As of January 31st, there was short interest totaling 18,470,000 shares, a decrease of 31.7% from the January 15th total of 27,050,000 shares. Based on an average daily trading volume, of 13,970,000 shares, the short-interest ratio is currently 1.3 days.
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If you had invested $1,000 in Disney’s IPO your stock today would be worth over 3 million dollars today.
