The CEO said his plan to cut costs by $5.5 billion will allow the company to start with a "modest" dividend and increase it over time. Theme parks have been propping up the business, and they are clearly highly resilient assets, but there will also be concerns that as a cost-of-living crisis wages in key markets, it could see ticket sales or merchandise revenue weaken, Streeter wrote in a note on 21 November. The stock is currently changing hands at $160.95, down 7.74% from the start of trading. IBD Stock Checkup assigns Disney a 52 Composite Rating, which combines key fundamental and technical metrics in a single score. It's fine-tuning this formula for the streaming era, and the 10 films coming to theaters this year may make 2023 a blockbuster year for Disney. However, the streaming business remains cash-intensive with Disney ramping up content spending by $8 billion this year to support its Direct to consumer offering, while projecting that the business will only be profitable in 2024. Since my return, I have drilled down into every facet of the streaming business to determine how to achieve both profitability and growth.. The pandemic depleted its parks and box office revenue in 2020 and 2021. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Iger's success in his previous transformations makes it possible for him to succeed in his third transformation. Discovery . The Walt Disney Company is a diversified international family entertainment and media enterprise. (read more). In the past, Peltz's involvement has led to positive changes in the companies he has worked with. Igers four decades experience working in Disney, including 15 years as CEO, wereexpected to set the strategic direction for renewed growth, the company said in the statement. On 12/29/2022, I gave a sell rating to Disney DIS at $87.18 based on this investment theme. But losses in the streaming business continue to hurt the business. Since 2020, the House of Mouse's free cash flow has declined from $2.6 billion to $94 million in 2022. Walt Disney Co. reported Q1 profit that fell substantially short of analysts' expectations which sent the stock price to a 10% decline in after-hours trading. At the time of writing (1 December 2022), the stock last closed at $97.87 per share on 30 November, having sunk 51.8% from its all-time high price of $203 on 8 March 2021. Turning Red Preview Beyond Disney+, continued financial success in the Disney Parks could also be a big boost to stock. Disneys valuation multiples are also reasonably compelling. Disneys content investments are also likely to be much more durable, given its iconic franchises, unlike Netflix which focuses a lot more on one-off shows. The fourth quarter was quiet for new releases, and as a result, subscriber growth slowed to 2.1 million subscriber additions. Streaming will benefit from the new content being created at Disney and Fox television and film studios as well as the deep libraries at the studios. We expect the unique content on ESPN and Disney Channel will provide the firm with a softer landing than its peers as viewing transfers to an over-the-top world over the next decade, Macker added.. Disneys theme parks and resorts are almost impossible to replicate, especially considering the tie-ins with its franchises and other business lines, he said. In the fourth quarter of 2022, Parks & Experiences booked revenue of $7.42bn, jumping 36% from the year-ago period of $5.45bn. Shareholder percentage totals can add to more than 100% because some holders are included in the free float. Disney stock predictions: Can Iger bring back Disneys magic? Disney is releasing seven other films outside of the MCU in 2023. A second location in Orlando, Fla., was announced in 1965. 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. 3, Wish II) and two are based on previous hits (Peter Pan & Wendy, The Little Mermaid). 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. Jennifer Saibil for Disney Parks, Experiences and Products segment sales jumped 70% to $7.4 billion in Q3. When looking for Disney stock projections, remember that analysts and algorithm-based predictions can be wrong, and shouldnt be used as a substitute for your own research. 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. It booked earnings per share (EPS) of $0.30 in the fourth quarter, down from $0.37 in the prior-year quarter. The US Consumer Price Index (, 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, Fourth-quarter revenue rose to $20.15bn from $18.53bn a year ago, but was 4.5% lower than consensus estimates polled by, A closer look at its segments reveals that revenue from Disney Media and Entertainment Distribution fell 3% year-over-year (, Disneys chief financial officer Christine McCarthy said during the earning call on. The number includes 12 million Disney+ subscribers and nine million Core Disney+ subscribers. Disney's stock has shown signs of recovery since the start of 2023, rising over 10% year to date as investors grow optimistic about the entertainment industry again. While its theme parks and cruise businesses got hit, the entertainment giant found success with its Disney+ streaming service. I am not receiving compensation for it (other than from Seeking Alpha). 2000-2023 Investor's Business Daily, LLC. Disney is much more than Marvel. The stock price is currently down 14.5% year to date, trailing the 27% return of the S&P 500 index. -2.08%. Read The Big Picture for detailed daily analysis of what's going on in the stock market. Analysts now see the stock, which has languished all year, to hit 145.51 in 12 months. At the time, the company said the move would conserve about $1.6 billion in cash based on the $0.88 a share it last paid. The earnings number also surpassed the . Since reaching an all-time high closing price in March 2021, Disney stock has been spiralling down to below its pre-pandemic level. Read on to find out. Shares of the entertainment giant slid over 40% in 2022. Cost basis and return based on previous market day close. Learn all the ways IBDs top investing tools can help you succeed in the market! Disneys chief financial officer Christine McCarthy said during the earning call on8 Novemberthat she believed the losses in Direct-to-Consumer had peaked. The California-based companys businesses include media networks, studio entertainment, interactive media, consumer products, theme parks and resorts. You'll now be able to see real-time price and activity for your symbols on the My Quotes of Nasdaq.com. More freedom in that process should lead to content being provided in the right medium to make the most money. Please. While revenue rose 26% year-over-year to. And no, 2022 wasn't an exceptional year. The sequel to 2009's Avatar became the third highest-grossing movie of all time in February, overtaking 1997's Titanic and earning $2.24 billion globally so far. The company wants a shake-up and a change of direction, and Bob Iger, who led the House of Mouse for 15 years, is clearly considered to be the best character for the job to throw a sparkle of magic back over the business, wrote Streeter of Hargreaves Lansdown. John Ballard owns Netflix and Walt Disney. Another activist investor, Dan Loeb, advised Disney, took a stake in the company, and pushed for change during the second half of 2022. Walt Disney Co. stock falls Friday, underperforms market Feb. 24, 2023 at 4:49 p.m. Stronger revenue from Disneys Parks & Experiences segment helped to cushion losses from the DTC. OK, Avatar: The Way of Water was an exceptional film, becoming the third highest-grossing film ever in a matter of weeks. Disney stock is listed on the New York Stock Exchange (NYSE) under the ticker DIS. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. That includes Pixar's "Luca," "Raya and the Last Dragon" and "Encanto." Disney+ added only 2.1 million subscribers last quarter, which left Disney's share price on a downward spiral in 2021. Disney stock price broke $50 in 2013, the stock price hit $75 a year later and then finally smashed the $100 ceiling in 2015. Although shares are down almost 16% from a year ago and 13% since the beginning of 2022, they've rallied over the past month and, as of the market close on Feb. 15, had regained their January loss. Is it profitable to invest in Walt Disney Co (The) stock? 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. In the surprise boardroom shuffle, Iger will serve as Disneys CEO for two years. Direct-to-Consumers (DTC) operating loss jumped to $1.47bn in the fourth quarter of fiscal2021/2022, from $630m in the previous fiscal year. Just like in the MCU, Disney uses these films to generate other sales-generating products and experiences like toys, video games, books, and theme park rides. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. Adding all this up, the Disney+ service is clearly being undervalued by the market right now. Three are sequels in a franchise (Indiana Jones and the Dial of Destiny, Guardians of the Galaxy Vol. A 66 Earnings Per Share Rating reflects a three-year earnings growth rate of -35%, which includes a 19% decline in fiscal '19 and a 65% drop in fiscal '20. This announcement could be a catalyst for the DIS stock to find a new direction, with the possibility of it being the single most significant factor impacting the stock price in the next 18 months. Iger's biggest strength lies in his experience, and both Disney staff and investors believe in him. Disney doubled down on its commitment to Disney+ becoming profitable by the end of 2024. Authors may own the stocks they discuss. 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. . It should be noted that conditions have already begun to change. The services algorithm-driven forecasting system said the stock is an acceptable long-term investment. The DIS stock price can go up from 99.500 USD to 124.869 USD in one year. View the latest Walt Disney Co. (DIS) stock price, news, historical charts, analyst ratings and financial information from WSJ. This top entertainment stock should bounce back in 2022. Disney has grown its revenue and operating income steadily since 2020 despite various headwinds. We were not perceived to be as accessible or as affordable to many segments as we probably should have been." Stock prices have fallen precipitously across sectors over recent months and we are now in a bear market for the first time since March 2020, when the Covid-19 outbreak triggered a market crash. The reopening of Walt Disney's (DIS -1.07%) theme parks and growth from its three streaming services (Disney+, Hulu, ESPN+) wasn't enough to push the stock higher in 2021. It's a new calendar year for Walt Disney (NYSE: DIS) investors, and so far, 2023 looks pretty good. Disney reported a stronger than expected set of Q3 2022 results on Wednesday, sending the stock up by about 8% in pre-market trading on Thursday. 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