How to Trade Disney Stock After Q2 Performance
Since Disney’s record high of $201.98 in March 2021, the stock fell nearly 60% lower by the end of 2022. While the stock initially rose 32% higher at the beginning of this year, it is down 22% from this high.
All eyes have been on Disney’s fiscal second-quarter earnings report. Learn more about Disney’s performance and what analysts are forecasting for the stock below.
|Stock:||Walt Disney Company (The)|
|Symbol for Invest.MT5 Account:||DIS|
|Date of Idea:||15 May 2023|
|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 Q2 2023 Performance Breakdown
Here are some of the key highlights from the latest fiscal second-quarter earnings report from Disney:
- Earnings per share of 93 cents are in line with expectations
- Revenue of $21.82 billion against $21.78 billion expected
- Disney+ total subscriptions 157.8 million vs 163.17 million expected
- 8% drop in membership at India’s Disney+ Hotstar, 600,000 lost in the US
- Operating income loss of $659 million vs $841 million expected
- Average revenue per user up 20% to $7.14 for US subscribers
- TV networks posted $6.63 billion, down 7% from a year earlier
- Net income of $1.49 billion against $597 million expected
Disney’s second-quarter earnings report showed that its streaming losses have narrowed even though the loss of 4 million Disney+ subscribers. This was due to a price increase which helped to offset the loss of subscribers.
Revenue and profit were broadly in line with analyst expectations with significant growth from Disney's theme parks but lower growth from its TV networks. All eyes have been on Disney’s streaming business and whether higher inflation is making consumers more cost-conscious.
Wall Street was expecting subscriptions at Disney+ to grow less than 1%, however, it posted a 2% decline in members. Most of these losses came from an 8% drop from India’s Disney+ Hotstar. Even though, it lost 600,000 subscribers in the US the average revenue per user rose 20%.
While the average revenue per user is a positive sign there are some challenges that lie ahead for Disney. The writers’ strike has caused a production shutdown in some shows such as Marvel Studios’ Blade and Star Wars series Andor.
There is also the ongoing federal lawsuit against Florida Gov. Ron DeSantis after the Republican signed legislation to void Disney’s development deals. The loss in subscriber numbers is also one to keep an eye on as lower economic growth can cause users to become more cost-conscious and cut back on services such as Disney+.
If a trend in lower subscriber numbers continues – especially if the writers' strike affects the production of new programs – then investors could start to worry. However, for now, the rise in subscription prices has offset the decline in subscribers. But this is a delicate balance that is worthwhile keeping track of.
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 14 buy, 4 hold and 0 sell ratings on the stock. The highest price level for a Disney stock forecast is $147.00 with the lowest price target at $107.00.
The average price target for a Disney stock forecast is $127.60.
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 on a break above $104.00 to allow for current volatility.
- Target just below the highest analyst price target of $127.00.
- 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 = $230.00 potential profit ($127.00 - $104.00 * 10 shares).
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how uncertain the economic environment is and how competitive the streaming sector is.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission 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) for executing a per-side transaction.
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 dashboard.
- 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.
Click on the banner below to trade Disney stock today! ▼▼▼
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.
The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.
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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