• Disney stock sank after hours after missing on both top and bottom lines.
  • Disney+ gained 7.9 million subscribers in fiscal Q2.
  • DIS stock has lost 33% of its value year-to-date, tries to find support at $100.

The Walt Disney Company (DIS) brought a little magic to an earnings season beset by forecast misses on Wednesday. Yes, it also missed Wall Street consensus estimates for earnings and revenue in its fiscal second quarter, but the entertainment and media conglomerate impressed with a sizable gain of streaming subscribers for its Disney+ unit

Read more stock market research

After the close the purveyor of recent hits like Encanto and Luca reported adjusted earnings per share of $1.08 compared with consensus forecasts of $1.19. Revenue was also hurt by a $1 billion charge for the termination of a license agreement, and because of it management reported revenue of $19.25 billion, nearly $800 million short of forecasts. DIS stock has shed 4.8% in Thursday's premarket to $100.15.

Disney Stock News: Disney+ subscriber base cuts distance with Netflix

Despite the forecast misses, Disney stock rose as high as 6% in Wednesday's afterhours trade before selling off. This positive sentiment was largely because its top and bottom line misses appear largely due to one-time charges. Otherwise, Disney's management appears to be executing quite well. Disney+ added 7.9 million new subscribers, which exceeded estimates for 5 million additions.

Additionally, this has brought Disney closer to the steaming king itself, Netflix. The latter expects to lose 2 million subscribers in the current quarter after losing 200,000 accounts in Q1. This would place it at 219 million subscribers worldwide. Disney+ on the other hand appears still to be in growth mode. The nearly 8 million new subscribers this quarter brings its total subscriber base to 137.7 million. When you include Hulu subscribers and ESPN+, the company's total subscriber base is already at 205 million. CEO Bob Chapek has forecast that Disney+ alone will reach 230 million to 260 million subscribers by 2024. Look out, Netflix! A legacy firm is prepared to eat your lunch.

Disney's theme parks unit has also outperformed as Covid-19 restrictions have been reduced and families become more willing to take post-pandemic vacations. The unit posted revenues of $6.7 billioin, about $400 million above expectations.

"At the Disney Media & Entertainment Distribution segment, our film and television productions have generally resumed, although we have seen disruptions of production activities depending on local circumstances," the company said in their earnings statement. "We have generally been able to release our films theatrically in the first half of fiscal 2022, although certain markets continue to impose restrictions on theater openings and capacity."

Disney Stock Forecast: $100 must hold or DIS headed to $90

Disney stock has been cut in half from its all-time high of $203 back in March 2021. In Thursday's premarket, the $100 threshold has been broken, but shares have not gone much below that and are mostly trading as low as $99.80. There are multiple past instances of $100, an important psychological figure, working as support over the past seven years. As long ago as 2015, this level has acted as support.

If $100 breaks in the regular market today, then Disney stock has further large round figures to use as support. These are namely $90 and $80. $90 worked as support in January and August of 2015 and again in October 2016. $80 was where investors caught DIS stock during the bottom of the Covid-19 panic in March 2020 and all the way back during a pullback in October of 2014.

The Relative Strength Index (RSI) reading of 24 on the weekly chart below means Disney is already pretty well oversold, but the Moving Average Convergence Divergence (MACD) has yet to cross over. Wait for that crossover to take place before jumping back into this name.

DIS stock weekly price chart

Disney stock weekly chart

 


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 

EUR/USD News

GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 

GBP/USD News

Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures