Skip to content

The Walt Disney stock hit an all-time high despite struggling parks business

The Walt Disney stock hit an all-time high despite struggling parks business

The Walt Disney (NYSE: DIS) stock has recovered all the pandemic related losses as the shares of the entertainment company are now up 6% so far this year to a new all-time high of $154.

The share price gains are surprising considering more than 50% year over year revenue drop from its parks and studio entertainment business in the latest quarter.

It appears that the investor’s sentiments have shifted towards its streaming and TV business. The stronger than expected Disney plus subscriber growth added to investor’s sentiments.

DIS The Walt Disney Company daily Stock Chart
The Walt Disney stock performance. Finviz data.

Streaming and media business supporting gains

The investors are focusing on the bright spot of Disney’s direct-to-consumer business, which grew 41% year over year in the September quarter.

The September quarter direct-to-consumer business revenue of $4.85 billion topped the consensus for $4.64 billion. The paid subscribers for Disney plus stood around 73 million at the end of the latest quarter, outpacing analysts’ expectations for 65.5 million subscribers.

Moreover, the growth from the media networks segment added to bullish sentiments. Media networks revenue grew 11% year over year to $7.21 billion. The market pundits have also been applauding cost-cutting measures to lower the impact of losses from parks and the studio entertainment business.

Guggenheim, for instance, provided a $165 price target, claiming a revenue decline from the studio entertainment business is likely to be offset by lower expenses on marketing/promotional campaigns. The entertainment company has cut its parks workforce by 32K in the past few quarters to reduce losses.

The majority of analysts look bullish over the revenue growth trends from two key businesses. RBC Capital Markets has set a $170 price target for Disney stock while Morgan Stanley raised the target price to $160 from $140.  

Strengthening fundamentals are backing the Walt Disney stock

Although its parks business has been devastated by the coronavirus pandemic, the fundamentals started improving amid the vaccine discovery. Several companies including Pfizer (NYSE: PFE) have announced that their vaccine has more than 90% effectiveness in treating COVID-19.

The majority of investors believe 2021 would be a recovery year for Disney and its parks business.  

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.