Stronger revenue from Disneys Parks & Experiences segment helped to cushion losses from the DTC. 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. Type a symbol or company name. It has also masterfully designed all of the content to work together, so viewers would need to follow the stories on streaming to understand all of the developments accounted for in the films released in theaters. That's right -- they think these 10 stocks are even better buys. 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. And the gains are not over yet. However, using the stock price history, algorithm-based price prediction service Wallet Investor can generate Disneys stock price forecast beyond 2022. So is Disney a buy? A closer look at its segments reveals that revenue from Disney Media and Entertainment Distribution fell 3% year-over-year (YoY) to $12.72bn in the fourth quarter of2022 owing to widening losses for Direct-to-Consumer (DTC) and Content Sales/Licensing. Consequently, it's best not to invest in Disney solely for the potential of a dividend, as there's no confirmed date of its return, and it will be marginal when it is back. Analysts now see the stock, which has languished all year, to hit 145.51 in 12 months. Its clear that some of our pricing initiatives were alienating to consumers. The Motley Fool->. Remember, Disney previously announced 10 original series each from Marvel and Star Wars, along with 30 live-action shows from Disney animation and Pixar over the next few years. Disney still has a mountain to climb to get its flagship streaming service, Disney+, to profitability, especially after taking a step back in its latest quarter by losing 2.4 million subscribers. Axon Stock Lights Up On Big Earnings Beat, Taser News, Apple Is Still The Richest Company By Squatting On Your Money. For 2023 fiscal year, Disneyexpected to spend cash content in the low of $30bn and $6.7bn of capital expenditure, up from $5bn in the 2022 fiscal year, McCarthy said. The history of the company started when brothers Walt and Roy founded the Disney Brothers Cartoon Studio on 16 October 1923, following Walts success in selling his first pilot cartoon film series,Alice Comedies. OK, Avatar: The Way of Water was an exceptional film, becoming the third highest-grossing film ever in a matter of weeks. After the August 10 close, Disney reported higher-than-expected fiscal Q3 earnings, as Disney+ streaming subscriptions came up strong. 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 . He ultimately reached an agreement with the Disney Board, which added an ally to the Board. However, investors were pleased with progress in slashing costs and narrowing streaming losses, even though they still came in. Throughout its near century-long history, Disney has grown into a multi-billion-dollar business, famous for its flagship family-oriented brands. In 2020, Disney pleased its shareholders with around 25% stock return. Revenues from Disneysstreaming services, including Disney+ and Hulu, under Direct-to-Consumer & International, jumped 41% in the fourth quarter of 2020 to $4.9bn and 81% to nearly $17bn for the fiscal year 2020 ending 3 October. For fiscal 2021 Disney earned $3.03 a share, 270% better than fiscal '20. The following catalysts were responsible for the increase in Disney's stock price from the date of my sell rating until 2/9/2023: On 1/11/2023, Disney announced the appointment of board member Mark Parker, who is also Nike's executive chairman, as the new chairman of the board. Heading into FQ3 2023 (December 2022) earnings report, Alibaba was expected to post revenues and Normalized EPS of $35.79B and $2.40, respectively. Cost basis and return based on previous market day close. 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. Making the world smarter, happier, and richer. Its "Lightyear" film opened to disappointing results. What if youre looking for a more balanced portfolio instead? Disney Relative Valuation (Yahoo Finance: Disney Relative Valuation 2/27/2023). 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. Build a CFD portfolio with your favourite companies. The median . The fourth quarter was quiet for new releases, and as a result, subscriber growth slowed to 2.1 million subscriber additions. ). Privacy Policy & Terms of Use. The former provides licences on a diverse range of product categories, including toys, apparel, games, accessories, and footwear. ESPN remains the premier domestic sports television network due to its extensive sports programming. 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. On the business side, Morningstars maintained its view that the firms direct-to-consumers products, such as Disney+, Hotstar, Hulu, and ESPN+ are set to be the drivers of its long-term growth. However, it was still way above the inflation target of 2%. In the last year, DIS' stock price corrected by -25.8%, and . Written by Some of the major properties licensed by the company include: Mickey and Minnie Mouse, Star Wars, Frozen, Disney Princess, Avengers, Spider-Man, Toy Story, Disney Classics, Winnie the Pooh and Cars. The long-term . While the decline was substantial, the entertainment company actually fared better than its biggest competitors, Netflix and Warner Bros. Capital Com Online Investments Ltd is a limited liability company with company number 209236B. Disney's dividend yield in 2019 was 1.2%, and CFO Christine McCarty has said the next one "will likely be a small fraction of our pre-COVID dividend with the intention to increase it over time as our earnings power grows." With our expectation that peak losses are now behind us, DTC operating results should improve going forward as we lay the foundation for a sustainably profitable business model, McCarthy said. Shareholders seemed most excited about the new streaming forecasts, as the company now expects to reach . Disney stock is struggling to regain its footing as the economy bounces back from the worst of the pandemic. Disneys stock price has significantly risen since its IPO. This will be Igers third transformation. But now it's trying to find its footing. However, the CEO responsible for Disney's golden years, Bob Iger, is back at the helm and on a mission to make streaming profitable. We value Disney stock at about $190 per share, which is roughly 70% ahead of the current market price. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. financial performance of Disney, which is cyclical. Historically, Disney's dividend yield ranged from 0.6% to 1.6% between 2011 to 2019. This transformation is focused on operational efficiency. However, this takeover is not expected to impact Disney's cash flow. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off. movie and theme park attendance and ratings for Disney-owned ABC and ESPN is up for debate. risk, allowing investors to make better decisions and streamline their work ow. Despite theaters reopening in 2022, the market had not returned to pre-pandemic form by the end of the year. What are analysts forecasts for Walt Disney stock? However, whether Disney stock is a good buy will depend on your investing goals and portfolio composition. Discovery. On a new IBD podcast, Jon Najarian explains 0DTE options and their unintended impact. Cost basis and return based on previous market day close. Disney is nearly doubling its content releases from top brands like "Star Wars" in fiscal 2022. As noted earlier, fiscal '21 EPS rose. Image source: Walt Disney. Iger's biggest strength lies in his experience, and both Disney staff and investors believe in him. Updated daily, it takes into Additionally, its forward PE ratio is the third highest among its peers, which further suggests that the stock may be overvalued. We are not in any way stepping away from streaming. Walt Disney Co (The) Stock Price Forecast for 2022: November 2022: Open: 110.038: Close: 112.286: 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. Box N-4865, Nassau, Bahamas. But slowing growth from Disney's marquee streaming service, Disney+, caused the shares to slump toward the end of the year. ET by MarketWatch Automation All 30 Dow stocks are falling, led by Boeing, Salesforce and Disney Feb. 24,. Under Iger's 14-year-plus tenure, Disney stock soared more than 400%, or about 12% annualized. But its parks and experiences segment is struggling, and the balance sheet has a lot of debt. All rights reserved. Here it stacks up against any other studio that had a top-10 film in 2022, which includes Paramount , Universal , and Warner Bros. On 10 November, Disney reinstalled Robert A. Iger as chief executive officer as Chapek stepped down. To make the world smarter, happier, and richer. 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. The stock is trying to rally after underperforming since Covid struck and the company got into political hot water with Florida. The name was changed to The Walt Disney Studio at Roys suggestion. It had been sinking in the year since, but most recently moved below its 50-day moving average. This overvaluation may be due to investors' confidence that growth will increase following Iger's restructuring efforts. Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Do Not Sell My Personal Information (CA Residents Only). Since reaching an all-time high closing price in March 2021. However, as the pandemic progressed to a more manageable stage, with Covid-19 restrictions being gradually lifted in line with rising vaccine roll-out, the streaming boom started to fade and Disneys stock subsequently has given up its gains. Learn how you can make more money with IBD's investing tools, top-performing stock lists, and educational content. Following Disney (NYSE: DIS) and its escapades over the past few years has been at least as exciting as paying money to see one of its blockbuster films. And don't forget to keep an eye on the market's action. "Encanto" won the award for animated feature film. Disney is much more than Marvel. Disney has become a force in the streaming business with 179 million subscribers. Disney suspended its dividend at the start of the COVID-19 pandemic, with its last payment date in January 2020. Disney was hit by residual pandemic headwinds and a tough economy. The company easily beat Wall Street targets for fiscal third-quarter earnings, revenue and subscribers. 10 stocks we like better than Walt DisneyWhen our award-winning analyst team has a stock tip, it can pay to listen. The streaming industry, in general, has been facing headwinds as people consume less content online as the economy opens up post-Covid. The parks segment has recovered well, with revenue nearly doubling year over year in the fiscal fourth quarter. Currently, DIS is trading at an EV-to-EBITDA multiple of 18.46, which is the highest among its peers. Then, economic declines in 2022 strained the streaming industry as people reduced discretionary spending. 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. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Disneys stock price gained 31.9% during 2019, compared to around a 2% increase in 2018. CEO Bob Chapek, former chairman of Disney Parks, Experiences and Products, was named new chief executive after Bob Iger stepped down in February 2020. Disney started off the year strong with the release of Marvel's Wanda Vision,The Falcon and the Winter Soldier, and Loki -- all original series released as Disney+ exclusives. At the time of writing (1 December2022), the stock was trading at $97.64, below the pre-pandemic level. Save over $170 and access 6 weeks of prograde stock research tools for only $49.95! Disney stock price broke $50 in 2013, the stock price hit $75 a year later and then finally smashed the $100 ceiling in 2015. The 90s brought two more stock splits, one 4 for 1 in 1992 and then a 3 for 1 stock split in the summer of 1998. It is also a constituent of the S&P 500 index (US500). The question above was, whether the transformation work can be completed before conditions change again. Disney trades at $169.30 as of publishing, off the 52-week low of $79.07. Data source: IMDB. Here it stacks up against any other studio that had a top-10 film in 2022, which includes Paramount , Universal , and Warner Bros. That includes Pixar's "Luca," "Raya and the Last Dragon" and "Encanto." $7.42bn, jumping 36% from the year-ago period of $5.45bn. ) 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. I have no business relationship with any company whose stock is mentioned in this article. Discovery. Opinions expressed by Forbes Contributors are their own. Disney's revenue sources are divided into two streams. DMED covers global film and episodic television content production and distribution activities. The majority of retail investor accounts lose money when trading CFDs. But the market is making the mistake of extrapolating one quarter's growth way out into the future. 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