The shares of Walt Disney (NYSE: DIS) have experienced a 5% decline over the course of this week. In all fairness, it’s important to note that the broader market itself has witnessed a downtrend over the last five trading sessions. However, this prompts the question: What specific developments have transpired within Disney that might have contributed to this recent performance?
The company recently partnered with a controversial influencer on TikTok, which angered parents who threatened on social media to never spend a single dollar on Disney.
Before that, Disney was also criticized for replacing the Seven Dwarfs from the classic fairytale ‘Snow White’ in an upcoming remake with a mix of non-Dwarf characters.
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Quarterly report with mixed results
But controversies aren’t the only thing pulling the stock down. The company released its Q3 earnings report last week on August 9.
Streaming losses continued to shrink, but Disney+ and Hulu suffered a 7.4% decline in subscribers from the previous quarter.
Its parks and experiences segment had a 13% increase in revenue, however, which is a good sign.
Analysts lower the fair value estimate
Morningstar’s analyst equity report lowered their fair value estimate to $145 from $155 in May because of the slow subscriber growth and losses from streaming. The analysts, though, expect annual top-line growth of 6% throughout 2027.
Morningstar’s analysts believe Disney networks remain important parts of the traditional pay-TV bundle. Networks like ESPN and FX still generate significant cash flows from both affiliate fees and advertising. Even though analysts expect pay-TV subscribers to decline annually, the underlying networks remain profitable.
DIS stock technical analysis
The daily chart shows a descending triangle pattern, which is a bearish pattern. The price typically breaks out on the lower side of the triangle.
The $85 level has proven to be a strong support level, meaning a strong catalyst is required to push the price lower. If the price trades below $85 and holds there, the next target is $50.
Despite the heavy losses this week, year-to-date DIS is also down 3.4%, underperforming the S&P 500’s 14% return during the same period.
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