Considering that the company's latest quarter saw its entertainment and media segment report $10 million in operating losses after a costly investment in streaming content, the box office success should help Disney continue its current growth trajectory. This level of yield is unlikely to attract a significant number of new income investors, and therefore may not increase the shareholder base and value significantly. Disney stock has seen a major sell-off this year, declining by almost 37% year-to-date, considerably underperforming the S&P 500 which remains down by 19% over the same period. Of course, analysts are measuring the company's performance against management's guidance that Disney+ will reach between 230 million to 260 million subscriptions by fiscal 2024. Turning Red Preview Beyond Disney+, continued financial success in the Disney Parks could also be a big boost to stock. While its theme parks and cruise businesses got hit, the entertainment giant found success with its Disney+ streaming service. In other words, the majority of Disney's theater content is almost no-brainer efforts. Disney has been on a downward trajectory since the beginning of 2022, despite starting strong at $157.83 on 3 January. The entertainment company, which will celebrate its centennial anniversary in 2023, is facing headwinds such as fourth-quarter earnings that fell short of analysts' expectations and a looming recession, which may lead toconsumers cutting down on non-essential spending such as entertainment costs. This measure against the company poses a political risk, as it may waste management's time and resources. The media giant ranks 14th in the 20-stock Media-Diversified group, based on that rating. Despite theaters reopening in 2022, the market had not returned to pre-pandemic form by the end of the year. The top 2022 film, Avatar: The Way of Water, was released by Disney's 20th Century Studios, which it acquired in 2019, also under Iger's magnificent direction. It's still recovering, but hit films are drawing in viewers. Key Points. There are several potential catalysts that could lead to higher share prices, including the announcement of a new CEO in the next 18-24 months (If the new CEO has the same credibility Iger has), potential growth in streaming by gaining market share, a rationalized pricing policy, cost cuts, the success of a new blockbuster show due to increased creativity, lower debt levels, keeping ESPN and buying the rest of Hulu, and, most importantly, having activist managers advising and standing behind Iger. Some investors may adopt a wait-and-see approach. Consider Disney's 2022 film slate versus its competitors. Learn how you can make more money with IBD's investing tools, top-performing stock lists, and educational content. UPDATE: Disney stock values have continued to drop. Additionally, Florida Gov. This sets the stage for a long-term vision for the company that focuses on the streaming business, margin improvement, cost reduction, and strategic reorganization. Never invest or trade money that you cannot afford to lose. This overvaluation may be due to investors' confidence that growth will increase following Iger's restructuring efforts. Please. After breaking out from a flat base and rising to record highs in November 2019, Disney stock tumbled more than 40% during the coronavirus market crash. The chart above illustrates how its revenue and operating income remained nearly stagnant for most of 2021, but have shown immense improvement with pandemic reopenings. However, if you are not currently a holder of Disney shares, it may not be the best time to buy. The stock also remains down by almost 50% from highs seen in 2021. Direct-to-Consumers (DTC) operating loss jumped to $1.47bn in the fourth quarter of fiscal2021/2022, from $630m in the previous fiscal year. Disneys stock price dropped nearly 70% of its price value in the near 2 year period between late 2000 and late summer 2002. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Disney+ added 14.4 million subscribers for a total of 152.1 million, above views. Disneys content investments are also likely to be much more durable, given its iconic franchises, unlike Netflix which focuses a lot more on one-off shows. Build a CFD portfolio with your favourite companies. Cost basis and return based on previous market day close. See our analysis of Disney valuation for more information on whats driving our price estimate for Disney and how its valuation compares with peers. Per capita spending in Disneys parks has also soared by 40% in Q2, versus the same period in the pre-pandemic era, indicating that these assets could emerge stronger than pre-pandemic levels, generating sizable cashflows for Disney and potentially masking some of the impacts of rising content investments. There were two more 2 for 1 stock splits shortly after in 1977 and 1973. Disney has also acquired several companies to reach wider audiences. The investment case for Disney hinges on the growth of Disney+, so it's understandable for the stock to trade in line with the rate of subscriber growth, but the market overreacted to Disney's results last quarter. (Author's comments in January 2023. All rights reserved. The latter has expanded very successfully across international markets based on its focus on producing local language content. We are not in any way stepping away from streaming. In addition, rising US inflation started to bite into household spending around the time when streaming services, including Netflix, raised their subscription fees. Meantime, theme park revenue picked up. Iger is getting his ducks in order in his third transformation. I am not receiving compensation for it (other than from Seeking Alpha). Disney Relative Valuation (Yahoo Finance: Disney Relative Valuation 2/27/2023). Disney Parks, Experiences and . Marvel has two more films for theater release in 2023, and another seven slated for release through 2026. The question above was, whether the transformation work can be completed before conditions change again. It's been a wild ride on Wall Street since early 2020, as the stock market fell into a bear amid the coronavirus crash. Since the beginning of 2022, Disneys stock has declined by 37%, steeper than 14.51% lost over 2021and was 1.5% below the pre-pandemic price of $99.40 on 16 October 2017,according to Trading Viewdata. 10 stocks we like better than Walt DisneyWhen our award-winning analyst team has a stock tip, it can pay to listen. Key price drivers. Invest better with The Motley Fool. Analysts now expect EPS to jump 66% for the fiscal year ending in September 2022, followed by a 39% jump in fiscal '23, according to S&P Global Market Intelligence. Disney should not divest Hulu because Iger himself has said that Hulu ensures coverage of different age groups and broadens the market for its streaming services. Disney announced a restructuring plan, which could potentially result in cost savings of $5.5 billion, and the company also announced the termination of 7,000 jobs. I have always believed by the way, that accessibility is a core value of the Disney brand. The Walt Disney Company is a diversified international family entertainment and media enterprise. It should be noted that conditions have already begun to change. Yes. This top entertainment stock should bounce back in 2022. The Motley Fool owns and recommends Netflix and Walt Disney. This isnt going down well with investors, who are increasingly focusing on cash flows as interest rates rise. Here it stacks up against any other studio that had a top-10 film in 2022, which includes Paramount, Universal, and Warner Bros. Iger's biggest strength lies in his experience, and both Disney staff and investors believe in him. DIS closed at $138.72 as of March 28, 2022 is -32% below its all-time peak. While revenue rose 26% year-over-year to. Iger also told investors that it has new sequels in the works for Frozen, Toy Story, and Zootopia. Disney Channels programming is made up of internally developed hits based on Disneys extensive library of feature films and animated characters. OK, Avatar: The Way of Water was an exceptional film, becoming the third highest-grossing film ever in a matter of weeks. The stock trades at about 25x consensus 2022 earnings and about 19x consensus 2023 earnings and things should only get better as streaming eventually contributes to Disney's bottom line. Disney suspended its dividend at the start of the COVID-19 pandemic, with its last payment date in January 2020. It only grossed roughly $156 million through late June, below its $200 million budget. . 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. Disney was also given the authority, which it never exercised, to build a nuclear power plant and an . As we've mentioned before, subscriber growth will not be linear each and every quarter, and the trend is driven by several factors, including content releases and promotions, McCarthyadded. The Disney stock price targets ranged from a high of $185and a low of $94. Type a symbol or company name. We capture key trends in the Dow during and after major market crashes in our interactive dashboard analysis, Market Crashes Compared.'. Since reaching an all-time high closing price in March 2021, Disney stock has been spiralling down to below its pre-pandemic level. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 86% of retail CFD accounts lose money, Analysts Have Strong Buys on These 2 Beaten-Down Stocks. (read more). We take a look at recentnews, the stocks price history and the latest Disney stock forecast. Still, considering the company's present measures as well as the past glory, the market is bullish about the stock and feels it might rally again in 2022.The Walt Disney Company, popularly. However, Disney's stock rallied to a high of $118.18 on 2/9/2022 and closed the day at $110.36. Disney Entertainment: entertainment media and content businesses globally, including streaming. Iger has already answered the second question by tweaking the internal structure and organizing Disney into three core business segments as follows: Iger has no plans to sell ESPN and should not sell Hulu. It also licenses characters from its film, television and other properties for use on third-party products and earns royalties. The Motley Fool has a disclosure policy. *Average returns of all recommendations since inception. *The average price target includes all analyst analysis, not just the most recent analysis presented in the chart. The companyrode the pandemic-induced streaming boom into the first quarter of 2021. Learn all the ways IBDs top investing tools can help you succeed in the market! Adding all this up, the Disney+ service is clearly being undervalued by the market right now. Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016. Susannah Streeter, Hargreaves Lansdowns senior investment and markets analyst, said that while Disneys subscribers growth has been impressive, the revenue growth rate was expected to start slowing. Highlights along the way included Disney's first sound film, "Steamboat Willie," in 1928, its first feature-length animated film, "Snow white and the Seven Dwarfs" in 1937, and a foray into television in 1950. Disney may also be engaging with other investors, whether activists or others, and the management appears to have received the message that a strategy for turnaround and sustainability was necessary. Finally, Disney made a decision to work on its pricing strategy. Consider Disney's 2022 film slate versus its competitors. Disney is facing mounting pressure from its streaming business. The streaming service was a key revenue driver during the pandemic, as people are stuck at home due to Covid restrictions. A second location in Orlando, Fla., was announced in 1965. Disney has become a force in the streaming business with 179 million subscribers. Is it profitable to invest in Walt Disney Co (The) stock? movie and theme park attendance and ratings for Disney-owned ABC and ESPN is up for debate. Moodys Daily Credit Risk Score is a 1-10 score of a companys credit risk, based on an analysis of the firms Disney Parks, Experiences and Products segment sales jumped 70% to $7.4 billion in Q3. While Covid-19 restrictions have limited its themeparkoperations, Macker believed the segment will rebound after capacity restrictions are lifted, partly because families still view the parks as prime vacation destinations. That leads to why I think Disney has a strong shot at a great year. Ownership data provided by Refinitiv and Estimates data provided by FactSet. Its expected to turn a profit in 2024. Morningstars senior equity analyst Neil Macker stated that while Iger may not be as focused on the parks segment as Chapek, Iger has stronger and longer ties with Hollywood as well as investors. risk, allowing investors to make better decisions and streamline their work ow. These are planned for release over the next few years. On this note, Disney is nearly doubling the amount of original content from its top brands in fiscal 2022. These fans then go on to further engage with the MCU through theater releases and content-based products. But Disney typically outperforms other media companies in ticket sales in any given year. Disneys valuation multiples are also reasonably compelling. The Motley Fool has positions in and recommends Netflix, Walt Disney, and Warner Bros. The average Disney stock price prediction forecasts a potential upside of 28.69% from the current DIS share price of $101.68. The California-based companys businesses include media networks, studio entertainment, interactive media, consumer products, theme parks and resorts. Create your Watchlist to save your favorite quotes on Nasdaq.com. The stock is now more than 35% off its 52-week high, according to IBD MarketSmith chart analysis. NFLX If Disney decides to reinstate its dividend, it may have a minimal impact on shareholder value. Tim Allen-free "Lightyear" fails at the box office Last summer , Disney released "Lightyear," the newest film in the "Toy . *Real-time prices by Nasdaq Last Sale. Revenue in the 2021/2022 fiscal year increased to $82.72bn, from $67.41bn in the same period in the previous fiscal year. The firm expects to see 240M to 260M subs just for Disney Plus by. Consider Disney's 2022 film slate versus its competitors. Under Iger's 14-year-plus tenure, Disney stock soared more than 400%, or about 12% annualized. View the latest Walt Disney Co. (DIS) stock price, news, historical charts, analyst ratings and financial information from WSJ. During Igers leadership from 2005 to 2020, Disney expanded its business with acquisitions of blockbuster-producing film studios Pixar, Marvel, Lucasfilm and 21. DTCs full year 2021/2022 revenue was up 8% to $55.04bn, from $50.86bn during the same period a year earlier. Meanwhile, a return to parks and box office ticket sales will keep the company growing until then. Theatrical releases, though, continue to struggle. Disneys stock price gained 31.9% during 2019, compared to around a 2% increase in 2018. The latest Disney stock news that moved the Disney stock price today came from its diluted first-quarter earnings report for 2022. Furthermore, Disney paid $900m for Major League Baseballs remaining 15% stake in the streaming company BAMTech (MLB), according to a SEC filing on, and was 1.5% below the pre-pandemic price of $99.40 on 16 October 2017,according to, In addition, rising US inflation started to bite into household spending around the time when streaming services, including Netflix, raised their subscription fees. Since IPO, Disney stock has been traded on the New York Stock Exchange under the ticker symbol DIS, it has been one of the 30 stocks in the Dow Jones industrial average since 1991. Properties for use on third-party products and earns royalties Disney-owned ABC and ESPN is up for debate analysis... In your browser valuation compares with peers period in the future, please enable Javascript and cookies your. Cookies in your browser all the ways IBDs top investing tools can help you succeed in works. Fla., was announced in 1965 noted that conditions have already begun to change stock also down... 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