Disney (NYSE: DIS) has been incurring losses in its streaming venture for nearly a decade, rendering its stock relatively stagnant. Over the last year, shares have declined by 9%, and the five-year trend shows a drop of 18%.
The prospect of renewed investor confidence hinges on Disney’s commitment to achieving profitability in its streaming business by Q4 of fiscal 2024. Notably, the company reported a 7% year-over-year growth in revenue, with its “Experiences” segment leading the way with a robust 16% increase.
Nevertheless, most of the company’s segments showed limited growth, notably the substantial “Entertainment” sector, which saw only a modest 3% year-over-year increase.
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At the time of press, Disney stock was trading at $95.08, showcasing an increase of 2.17% since its previous closure and adding 5.33% to its value in its last five trading sessions. Since the beginning of 2024, this stock has climbed 4.82%.
Reasons for optimism
With the evident lack of ideas that have plagued Disney for the previous years and the recycling of content, the time has come for a change.
Blackwells Capital, an investor in The Walt Disney Company, submitted a preliminary proxy statement to the Securities and Exchange Commission (SEC) last week, proposing the nomination of three qualified candidates, as reported on January 22.
Shareholders will have to choose among three competing slates of candidates at the 2024 Annual Meeting – those put forth by Disney, Trian, and Blackwells. Blackwells’ qualified candidates are well-positioned to bolster Disney’s transformation initiatives, adding expertise.
Disney recently introduced HoloTile, which presents a solution to specific VR challenges. The system comprises numerous small, circular “tiles,” approximately the size of a silver dollar, each functioning as a miniature omnidirectional treadmill.
With this recent news, the company seems to be finally changing its direction and focus towards innovation.
Wall Street target for DIS stock
The turn towards innovation seems to be already giving results, as the analysts from TipRanks awarded this stock with a ‘strong buy.’ The price target is $107.89, indicating a 13.47% upside from the current price.
Of 21 analysts, 16 advised ‘buy,’ 5 to ‘hold,’ and none ‘sell.’
Analysts from TradingView are slightly less optimistic but bullish, with a ‘buy’ rating based on 30 opinions. Of these, 17 recommended a ‘strong buy,’ 5 ‘buy,’ 6 ‘hold,’ and only one ranked this stock at ‘strong sell.’
After a decade of stagnation, whether 2024 will be a year of innovation and a complete change of direction for Disney remains to be seen.
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