Disney (DIS) stock price reaches highest level since April after overtaking Netflix as streaming leader

Disney (DIS) stock advanced to $120.13, up 6.9%, in the afterhours market on Wednesday after the entertainment conglomerate's parks division led the way toward a solid beat on top and bottom lines. Disney reported fiscal third quarter adjusted earnings per share of $1.09 on revenue of $21.5 billion. Wall Street had expected adjusted EPS of $0.99 on revenue of $21 billion, so both beats were well ahead of expectations.

Disney earnings news

As families returned to more normal vacation practices after the covid pandemic in the quarter ending in June, Disney's parks division brought in revenue about 70% above the same quarter last year. The division brought in $7.39 billion with all theme parks now open. Management did say the segment's cruise line division still has room to recover though.

"Even while the average daily attendance at our domestic parks across the first three quarters of this fiscal year was slightly below 2019, we have delivered significantly higher revenue and operating income over that same time period," CFO Christine McCarthy said.

The best figure out of the entire earnings call was 152.1 million. That is the total number of Disney+ subscribers. This figure is up 31% from the 116 million tallied one year ago. Hulu subs rose a much smaller 8% YoY to just over 46 million, and ESPN+ gained 53% more subscribers YoY to just under 23 million. Taken together, Disney is now neck-and-neck with Netflix at just above 221 million subscribers. Disney's figure appears to be slightly ahead, but the streamer double counts households with more than one subscription and also tends to charge a lot less for its services.

Management lowered expectations for long-term subscriber growth across its Disney+, Hulu and ESPN+ subscriptions. Previous guidance for 230 million to 260 million total subscribers has been downgraded to 215 million to 245 million by the end of 2024.

McCarthy said total annual spending on content company-wide would remain in the low $30 billions for this fiscal year and the next few years.

Disney stock forecast

Disney stock's recent jump to the $120s in Wednesday's post-market means it has conquered the June 1 range high above $112 and the late April/early May price ledge at $116. Now that $116 level should develop into support. The next price target is $133 from the ledge created in mid-April where that price served as resistance. The 200-day moving average is just below here at $131.20.

Disney stock only broke through the 100-day moving average in Wednesday's regular session, so it appears that this slugger is jumping from A-ball to the big leagues in short order. The downtrend in H1 2022 appears to be over if DIS can remain above the 100-day. The Moving Average Convergence Divergence (MACD) shows an uptrend, so this occurence seems likely. For now Disney stock will likely bounce between the 100-day and 200-day until enough accumulation helps it move above $133. Do not expect this to happen too fast. Disney stock is already up 33% since July 14.

Disney daily chart