In a move worthy of an Oscar, Iger directed the acquisition of Marvel Studios in 2009 for $4 billion. Can Disney fight its way out of the slump? But given Netflix's operating margin of 23.5%,Disney+ should be a major contributor to Disney's bottom line. John Ballard owns Netflix and Walt Disney. We expect that Iger will unwind some of the major changes put in place by Chapek. The consensus 12-month average Disney share price forecast was $132.07, a 34.95% potential increase from the closing price of $97.87 on 30 November. Much of this content will come later in the year, as McCarthy said, "We expect Disney+ subscriber net adds in the second half of fiscal 2022 will be meaningfully higher than the first half of the year.". In the sites Disney stock forecast for 2023, Wallet Investor projected the stock to trade at $108.72 in December 2023. (read more). Disney is facing mounting pressure from its streaming business. Key Points. Disneys valuation multiples are also reasonably compelling. As of 1 December, 22 analysts tracked by Market Beat recommended a moderate buy rating for Disney stock, while 19 recommended a buy and three gavea hold rating. After the August 10 close, Disney reported higher-than-expected fiscal Q3 earnings, as Disney+ streaming subscriptions came up strong. It's hard to believe the $172 billion market cap behemoth started out in 1923 as Disney Brothers Cartoon Studio, by Walt and his brother, Roy O. Disney. I have always believed by the way, that accessibility is a core value of the Disney brand. The demographic difference in age is tremendous. 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. Disney Channels programming is made up of internally developed hits based on Disneys extensive library of feature films and animated characters. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. This announcement could be a catalyst for the DIS stock to find a new direction, with the possibility of it being the single most significant factor impacting the stock price in the next 18 months. Disney has become a force in the streaming business with 179 million subscribers. And that compounds the problem of real-world inflation for Disney, which said it spent $3.6 billion on capital expenditures in the past fiscal year and will increase that by $2.5 billion in 2022 . Activist investors continue to play a cooperative role. The stock is now more than 35% off its 52-week high, according to IBD MarketSmith chart analysis. 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. But Disney typically outperforms other media companies in ticket sales in any given year. Discovery . These fans then go on to further engage with the MCU through theater releases and content-based products. 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. Disneys chief financial officer Christine McCarthy said during the earning call on8 Novemberthat she believed the losses in Direct-to-Consumer had peaked. He has credibility. . *Stock Advisor returns as of February 8, 2023. That makes Disney one of the worst . This news was received favorably by investors. This overvaluation may be due to investors' confidence that growth will increase following Iger's restructuring efforts. It actually lost subscribers in the fourth quarter, and losses were still staggering. However, the next day, on February 9, 2022, he suggested the possibility of selling Hulu during an interview with CNBC. To make the world smarter, happier, and richer. That's nearly 21% potential upside. On 12/29/2022, I gave a sell rating to Disney DIS at $87.18 based on this investment theme. It is also a constituent of the S&P 500 index (US500). 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. However, as of 2/27/2023, there are other options for income, such as CDs yielding 4.5% to 5% and 10-year US Treasuries yielding 3.95%, with 1-year yielding 4.75%. The companyrode the pandemic-induced streaming boom into the first quarter of 2021. It remains our number one priority. DIS. However, using the stock price history, algorithm-based price prediction service Wallet Investor can generate Disneys stock price forecast beyond 2022. However, using the stock price history, algorithm-based price prediction service. Learn how you can make more money with IBD's investing tools, top-performing stock lists, and educational content. ). Chart by author. of $0.30 in the fourth quarter, down from $0.37 in the prior-year quarter. Meantime, theme park revenue picked up. The company reports fiscal fourth-quarter results in November. The Walt Disney company reported revenue growth of 9% and 23% for the fourth quarter and the full fiscal year 2021/2022 ended 1 October 2022 respectively, the company announced on 8 November. Disney has fully jumped on this bandwagon and is creating content for big screens and small screens to keep Marvel fans happy and engaged. This top entertainment stock should bounce back in 2022. The Marvel Cinematic Universe (MCU) has grossed more than twice the amount of the next-highest franchise, Star Wars -- also owned by Disney. Dow Jones Falls; Nextracker IPO Pops 50%; Waitlist For Microsoft's Web Transforming AI Grows As GOOGL Market Cap Crashes $173 Bil, Disney Earnings Top, Disney+ Subscribers Fall; Iger Cuts 7,000 Jobs; Peltz Ends Proxy Battle, Stock Market Hits Brick Wall; DraftKings Makes Leaders List, Dow Jones Rallies 250 Points After Jobless Claims; Disney Surges On Earnings. Three are sequels in a franchise (Indiana Jones and the Dial of Destiny, Guardians of the Galaxy Vol. But now it's trying to find its footing. Disney CEO Bob Chapek mentioned that the company has over 340 local original titles in various stages of development and production across its direct-to-consumer platforms, which would include Hulu and ESPN+. Written by 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. The fourth quarter was quiet for new releases, and as a result, subscriber growth slowed to 2.1 million subscriber additions. BREAKING: Salesforce Soars Late, Tesla Doesn't Unveil New EV. The day before, on February 8, 2022, he had said: When you think about it, Abbott Elementary airs on ABC, then it goes to Hulu. That legislation gave Disney taxing power over the 25,000 acres it had bought up so it could build roads, power plants, and water and sewage systems, using money it collected from itself through property taxes within the district boundaries. 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. 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. Disney Parks, Experiences and Products segment sales jumped 70% to $7.4 billion in Q3. At the time, the company said the move would conserve about $1.6 billion in cash based on the $0.88 a share it last paid. The site suggested the stock could reach $118.328 in three years, according to its Disney stock forecast for 2025. The Walt Disney Company (DIS) Stock Historical Prices & Data - Yahoo Finance U.S. Markets closed S&P Futures +2.25(+0.06%) Dow Futures 32,830.00 +4.00(+0.01%) Nasdaq Futures 12,015.75. The Disney stock price targets ranged from a low of $94 to the high of $185. DIS is relatively overvalued on two common measures compared to its competitors. Never invest or trade money that you cannot afford to lose. That's right -- they think these 10 stocks are even better buys. We value Disney stock at about $150 per share, which is roughly 50% ahead of the current market price. That's nearly 22% below the high set on Jan. 3.". 3 Dates for Disney Stock Investors to Circle in March, Stocks most and least liked by hedge funds and mutual funds - Goldman, T. Rowe Price Associates, Inc. (Investment Management), Northern Trust Investments, Inc.(Investment Management), Chairman-International Content & Operations, Chief Compliance Officer & Senior Vice President, Chief Diversity Officer & Senior Vice President, Chief Financial Officer & Senior Executive VP, Chief Human Resources Officer & Senior EVP, Chief Security Officer & Senior Vice President, EVP-Controllership, Financial Planning & Tax, Executive VP-Corporate Social Responsibility, Regional Director Bus Dev Operating Participants, Senior Executive Vice President & General Counsel, Registration on or use of this site constitutes acceptance of our. Here it stacks up against any other studio that had a top-10 film in 2022, which includes Paramount , Universal , and Warner Bros. Making the world smarter, happier, and richer. movie and theme park attendance and ratings for Disney-owned ABC and ESPN is up for debate. The difference between trading assets and CFDs. Remember that markets are volatile, and that past performance cannot guarantee future results. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. It is in many respects, our future. There's just so much to unpack when it comes to the world's largest (and perhaps most complex) entertainment company. GERMANY - 2022/05/30: In this photo illustration, a Disney logo seen displayed on a tablet. Some investors may adopt a wait-and-see approach. balance sheet and inputs from the stock market. If you are already a current owner of Disney shares, it may be advisable to hold onto the stock and give Iger's transformative restructuring a chance. Why I rated Disney (NYSE:DIS) as a Sell in December 2022 is because of weak fundamentals, uncertainty surrounding the return of CEO Bob Iger, competition, and the highly variable financial performance of Disney, which is cyclical. On the other hand, the companys themeparkand film-making businesses have resumed with the lifting of Covid-19 restrictions. Netflix (NFLX) also reported slowing revenue growth in the third quarter of 2022, ending September with year-on-year revenue growth of 5.9% compared to 16.3% in the same period of 2021. Disney is much more than Marvel. This was a remarkable jump from the earnings of the same quarter in the previous year that came in at $0.32. The majority of retail investor accounts lose money when trading CFDs. 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. The stock currently trades at just over 20 times Disney's peak earnings in fiscal 2018. Disney stock predictions: Can Iger bring back Disneys magic? Data source: IMDB. 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. However from that point Disney, like many Dow 30 members, was part of a huge run up over the next 3 years. Its like 60-years-old or around, estimating on ABC and then the 30s on, ( https://www.streetinsider.com/dividend_history.php?q=DIS), (Yahoo Finance: Disney Relative Valuation 2/27/2023). Cost basis and return based on previous market day close. In June, then-CEO Bob Chapek explained that "We have seen each new Disney+ original Marvel series attract incremental viewership and new subscribers that hadn't previously engaged with Marvel content on the service." Walt Disney Co. stock falls Friday, underperforms market Feb. 24, 2023 at 4:49 p.m. Is it profitable to invest in Walt Disney Co (The) stock? Disneys stock price dropped nearly 70% of its price value in the near 2 year period between late 2000 and late summer 2002. Shares of the entertainment giant slid over 40% in 2022. According to the numbers, the earnings per share hit $1.06. It's been a roughly ride for Chapek, who is navigating the huge investment needed to keep people subscribing to Disney+, in addition to reopening parks and cruises. However, Disney's stock rallied to a high of $118.18 on 2/9/2022 and closed the day at $110.36. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. *Average returns of all recommendations since inception. Despite theaters reopening in 2022, the market had not returned to pre-pandemic form by the end of the year. That leads to why I think Disney has a strong shot at a great year. Author's Comment in January 2023. However, whether Disney stock is a good buy will depend on your investing goals and portfolio composition. The sell-off was prompted by a combination of macroeconomic headwinds and increased competition in streaming that meant succeeding in the industry was costly. At the time of writing (1 December2022), the stock was trading at $97.64, below the pre-pandemic level. The information and content are subject to change without notice. Disney's content wins are slowing down, too. Follow Matt Krantz on Twitter at @mattkrantz, View Breakout Stocks & Technical Analysis, Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest, Catch The Next Big Winning Stock With MarketSmith. 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. The question above was, whether the transformation work can be completed before conditions change again. -2.08%. Disney has been on a downward trajectory since the beginning of 2022, despite starting strong at $157.83 on 3 January. Moodys Daily Credit Risk Score is a 1-10 score of a companys credit risk, based on an analysis of the firms The landscape looks a lot different these days, but some things never change, such as James Cameron's stunning ability to create incredible sales-generating films, and Disney's ability to find people like him and churn out new hits from reliable franchises. Historically, Disney's dividend yield ranged from 0.6% to 1.6% between 2011 to 2019. The Motley Fool has positions in and recommends Walt Disney and Warner Bros. The Motley Fool recommends Comcast and recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. Shares of Disney are down nearly 25% this year, making it one of the worst Dow stocks. At the time of writing (1 December 2022), the stock last closed at $97.87 per share on 30 November, having sunk 51.8% from its all-time high price of $203 on 8 March 2021. 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