Trading Disney After Netflix Subscriber Beat
Shares in Disney have been in the spotlight after the media giant recorded 221 million subscribers for its Disney+ and Hulu streaming service – surpassing the total number of Netflix subscribers.
While competitors such as Netflix and Warner Bros Discovery have announced a drop in subscribers and change in content strategy, Disney seems to be bucking the trend – at least for now.
Learn how to trade Disney shares below.
|Stock:||The Walt Disney Co.|
|Symbol for Invest.MT5 Account:||DIS|
|Date of Idea:||16 August 2022|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Disney Beats Netflix Subscribers & Announces Higher Prices
In Disney’s latest third-quarter earnings report, figures showed that Disney+ subscriptions rose to 152.1 million beating analyst expectations of 147 million. The subscriber count from Disney+, Hulu and ESPN totalled 221 million exceeding Netflix’s 220 million.
The company also announced plans for an advertising-supported Disney+ service and a $3 increase in the price of its ad-free service to $10.99. It also announced price rises for Hulu and ESPN subscribers.
The price increases are a plan to make its service more profitable after the operating loss for its streaming service recorded a $1.1 billion loss. This was due to the higher cost of content.
However, Chief Financial Officer Christine McCarthy revealed in the earnings call that Disney+ losses will start to peak in 2022 and has previously stated they will lose money on Disney+ until 2024.
Hedge Fund Manager Dan Loeb Buys Stake in Disney, Pushes for ESPN Spin Off
Third Point hedge fund manager Dan Loeb announced a new stake in Disney, accompanied by a letter to Disney CEO Bob Chapek to spin off its sports network ESPN. Loeb stated that as a separate entity, ESPN could pursue more revenue streams that would be difficult as part of Disney such as sports betting.
The share price initially moved higher on the news announcement as Loeb has been a prominent activist investor in Disney. He previously built a stake in Disney to push it to ramp up its streaming service.
Disney Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Disney stock forecast in the past 3 months, there are currently 17 buy, 4 holds and 0 sell ratings on the stock. The highest price level for a Disney stock forecast is $160.00 with the lowest price target at $120.00.
The average price target for a Disney stock forecast is $138.80 which represents around 11% upside from current levels, at the time of writing.
Source: TipRanks, 16 Aug 2022
An Example Trading Idea for the Disney Stock Price
An example trading idea for the Disney share price could be as follows:
- Buy the stock at $116.00 to allow for current market volatility.
- Target just below the average analyst price target at $138.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Disney shares:
- If target is reached = $220.00 potential profit ($138.00 - $116.00 *10 shares).
It’s wise to remember that the share price is unlikely to go up in a straight line and it may even go much further down before it rises, especially considering the recent volatility in global stock markets.
Therefore, be sure to exercise good risk management which is one of the most important aspects of trading successfully. You should always know how much you could potentially lose on a trade and the risks involved.
Another factor to consider is the commission which can eat into your profits. With the Admirals Invest.MT5 account you can buy US stocks from $0.02 per share. This means buying 10 shares in Disney stock would result in a commission of $0.20 ($0.02 * 10 shares).
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Disney Stock in 4 Steps
With Admirals, you can buy shares in companies like Disney with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the Trader’s Room.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance.
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Do You See the Disney Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Disney's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
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