Disney’s (NYSE: DIS) shares saw a steep decline in recent weeks as the media and entertainment giant continues to face backlash from conservative activists over the company’s alleged promotion of liberal or progressive agendas and political bias in their content, among other things.
Meanwhile, Walt Disney’s year-long dispute with Florida’s Republican governor Ron DeSantis also continued to escalate last week after the conglomerate scrapped plans for its $1 billion Florida campus that would have added 2,000 jobs to DeSantis-led state.
All of those challenges have weighed on Disney’s stock price in the recent period.
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Over the past month, Walt Disney’s stock has been fluctuating in a significant trading range from $90.79 to $103.76. During that period, DIS lost more than 8.4% of its value and is currently trading at $91.35 ahead of the market opening on Monday, May 22.
The stock is now testing the year-to-date lows near $90, with the failure to stay above it likely a sign shares will continue to move lower. The next stop would be the $85 zone, which hosts the post-Covid lows. On the upside, the confluence of 100- and 200-weighted moving averages (WMAs) around the $100 mark is acting as resistance.
What analysts say on Disney
A portion of Disney’s recent stock declines came earlier this month when the company’s Disney+ subscriber numbers missed Wall Street estimates for the second quarter. Additionally, Disney also reported worse-than-expected earnings per share (EPS), while revenue rose 13% year-over-year, and was in line with estimates.
At the same time, analysts at Macquarie downgraded Disney’s stock to ‘neutral’ from ‘outperform,’ citing short-term uncertainties around the conglomerate’s earnings, valuation, and sentiment, despite the company’s ad expenditure growth.
In addition, the analysts led by Tim Nollen also trimmed the price target for DIS from $125 to $103, implying a potential upside of more than 12%.
“We still appreciate Disney’s ability to successfully transform to a DTC-first streaming business over time, but now see more interim uncertainties. We see too many structural and macro headwinds extending beyond the quarter to support an Outperform rating.”
– analyst Tim Nollen said.
Nollen also said he expects Disney’s key parks business to slow due to headwinds from a potential economic recession.
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