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Tag: DIS Stock

  • Walt Disney Co. (DIS) shares Down After Hours Amid Investor Frenzy Over Growing Concerns

    Shares of the entertainment behemoth, Walt Disney Co. (DIS) suffered a downtrend in the after-hours on April 19. The stock fell below its 52-week low of $126.82 a share to reach $126.35 in the late trading session. Plunging by 4.21% in the after-hours, DIS had increased by 3.23% in the prior session.

    Source: Corporate Finance Institute

    This downfall came from growing fears among the investors as streaming wars continue to escalate while the company itself is surrounded by a puddle of mud.

    What is Happening?

    According to a report on Bloomberg, Florida Governor Ron DeSantis asked the state’s legislature to consider terminating the special privileges of Walt Disney. This dispute stems from the fact that it has been increasingly indulgent in the partisan political fray.

    Known for family-friendly movies, television shows, and theme park rides, the brand had spent decades avoiding any kind of controversy. However, lately, the magic kingdom has been showing signs of being infected with real-world ugliness. While usually political divides brought the fairytale land into controversy, other times it willingly waded into cultural issues.

    The latest dispute has been ongoing over the fact that the behemoth announced its theme parks as gender-neutral, firing up the “Don’t Say Gay” labeled law. The dispute escalated to DIS being in the crosshairs of many including the Florida governor. Thus, now it threatens a 55-year-old law that enables the company to essentially function as its own municipal government.

    Market Frenzy to Contribute

    On top of the dispute and possible termination of the special privileges of the company, the market frenzy over NFLX’s earnings also contributed to the downfall. After the bell on Tuesday, the streaming giant Netflix posted quarterly earnings. The earnings caused a frenzy among investors as for the first time in a decade NFLX lost subscribers. With increasing competition amid rising inflation, investors now fear for most of the streaming services that charge a good sum. Subsequently, most streaming stocks including SPOT, PARA, WBD, etc. fell down in the after-market session.

    What’s Next?

    As per an article on The Street, DIS’ special district is expected to dissolve in June 2023. While this may cause a blow to the company in addition to the increasing competition for its streaming services, the company has much in plans to ensure growth.

    In its latest earnings, the company posted record revenue and operating profits despite global travel issues and the Covid-19 pandemic. Since the pandemic impacted its operations two years ago, Disney is now set to launch its biggest ride as its 50-year anniversary approaches.

    The picture will become much clearer when the company posts its next earnings on May 11, 2022.

  • Disney (DIS) Or Netflix (NFLX) – Which Stock Has More Potential To Grow

    Before Friday’s opening, Disney’s stock price jumped 7 percent. Investors praised the current medium-term plan of the company, which includes a multi-fold rise in the streaming audience and extensive investment in new content development. By December, Disney+ raised the number of paying subscribers to 87.6 million and has every chance to overcome the bar of 90 million by the end of the year-despite the fact that originally a year ago, those figures were predicted to be seen no earlier than 2024 when the platform was launched. Now in the face of Netflix, Disney+ is just 2 times inferior to its nearest counterpart. It took 13 years, however for the online entertainment leader to attain the current 200 million paying accounts.

    The group expects an audience of 230 to 260 million people for Disney+ by 2024 with the current dynamics, and 350 million with Hulu and India’s Hotstar. In the fast-growing Indian market, a 30 percent to 40 percent increase is expected. At the same time in the near future, the company expects to start raising the subscription price: up to $7.99 per month in the U.S. and 8.99 euros per month in the EU. All these steps together will allow payback to be accomplished in less than 4 years.

    A massive content development program is one of the key things that can ensure such a fast growth of the audience eager to renew a subscription. Disney would increase its animation and filming budget to $14-16 billion a year. Annually, the viewer will receive around 100 new episodes and films. It has already been put into development, including 15 full-length animated and feature films, as well as many serials on the worlds of Marvel and Star Wars. The latter is particularly important: Disney was spurred to write two more spin-offs of this Saga by the resounding success of the space western Mandalorian.

    In the extended session immediately after the announcement of the new plan, DIS shares grew. The rise was already more than 7 percent, initially adding around 4 percent before the start of the main session on Friday and concluded the day rising over 13%. Netflix shares rose at the same time but within 1 percent. Disney is now trading at over $175 per share, which is 11% higher than its equilibrium price. By comparison, Netflix is seriously running behind its fair value. We predict that they will grow by 9 percent to $545 per share in the coming months.