I believe that will continue to be the case for decades to come. Disney’s iconic brands, theme parks, and media library have bolstered Disney stock for decades. That does not mean that Disney stock has become a sell for long-term holders of DIS stock. That makes the forward price-earnings ratio of Disney stock which is just under 22, seem high. Over the next five years, they think the company’s average annual earnings will increase by only 1.8%.
Analysts, on average, predict that its profits will fall by 7.2% this year and 1.4% the next. The disparity has now started to affect Disney’s profit growth. The company faces a similar challenge with Disney+, for which it charges only $6.99 per month. ESPN+, the company’s sports streaming station, costs only $4.99 per month. Disney’s ESPN Networks received about $9 for every cable and satellite subscriber. Still, for all of the accolades about Disney’s streaming services, they do not fully make up for the revenue it lost from cable cutting. Now optimism about Disney+ has taken DIS out of this range. Losing some of the subscriber base of the Disney Channel and ESPN left DIS stock stuck in a range until recently. However, despite these successes, Disney stock appears to trade based on the performance of its channels. Blockbuster films such as Avengers: Endgame and last year’s Black Panther continue to drive both headlines and massive profits. Like the character, Inigo Montoya, DIS has been in the “revenge business” so long, it may not know what to do next.ĭisney’s Parks, Experiences, and Products division delivers consistent, double-digit profit growth. However, now Disney’s situation reminds me of the plight of a character from a film for which the company now owns most of the rights, The Princess Bride. Many expect Disney+ will hold up well not only against Netflix, but also against whatever offering Comcast (NASDAQ: CMCSA) or AT&T’s (NYSE: T) WarnerMedia launch. Disney stock has moved steadily higher since then, and now the Disney stock price has surpassed $140 per share. Soon after, Disney stock price shot higher after the company revealed the specifics of its new streaming service, Disney+. InvestorPlace - Stock Market News, Stock Advice & Trading Tips I meant that the company would respond to Netflix (NASDAQ: NFLX), undermining its cable TV business by taking subscribers from NFLX.
Disney+ Took Disney Stock Out of Its Rangeīack in April, when Disney stock traded in the $115 per share range, I predicted that DIS would propel its shares higher by getting revenge.
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