It is safe to say that Disney’s (NYSE: DIS) stock price trajectory has been quite tumultuous this year as the company faced a formidable downturn amid controversies involving alleged political bias and legal clashes.
Conservative activists raised concerns over the media giant’s content, leading to a significant dip in its stock value. Combined with legal battles against Florida governor Ron DeSantis and persistent operating losses in key business segments, DIS price was floating in the red territory for the bulk of 2023.
However, this was the case until Thursday, November 9, when Disney’s shares surged by nearly 7% to $90.34, intriguingly flipping its year-to-date performance back into positive territory.
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Why has Disney’s stock surged?
The significant spike in Disney’s shares on November 9 came after the media and entertainment giant unveiled a largely positive Q4 2023 financial report.
The company posted adjusted earnings per share (EPS) of 82 cents, beating the consensus projection of 70 cents. The earnings beat was fueled partly by profit at Disney’s ESPN+ streaming service and continued growth at its theme parks.
Revenue, on the other hand, came in at $21.24 billion, missing Wall Street’s projection of $21.33 billion. This is the second consecutive revenue miss for the company and the first time it reported back-to-back revenue misses since early 2018. Year-over-year, revenue grew 5%.
The Los Angeles, California-based mass media conglomerate reported 150.2 million Disney+ subscribers for the latest quarter, while analysts were looking for 148.15 million.
Meanwhile, Disney also announced plans to “aggressively manage” its cost base, ramping up its cost-cutting efforts by another $2 billion, lifting the overall target to $7.5 billion.
Disney stock price analysis
As noted earlier, the latest upswing in Disney’s stock brings its 2023 performance back into positive territory. At the current price of $90.34, DIS is now up 1.5% year-to-date.
Looking ahead, it remains uncertain whether DIS will manage to retain its current momentum, although analysts were encouraged by the company’s latest cost-cutting measures.
At the same time, Disney CEO Bob Iger said the company will be focused on “four key building opportunities” going forward, including “achieving significant and sustained profitability in our streaming business, building ESPN into the preeminent digital sports platform, improving the output and economics of our film studios, and turbocharging growth in our parks and experiences business.”
Disney also reaffirmed its previous guidance that streaming will become profitable by the fiscal Q4 2024, however, it warned that “progress may not look linear from quarter to quarter.”
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