DIS - Disney stock price forecast: golden cross forms ahead of earnings
2024-02-06 07:40:13 ET
Walt Disney (NYSE: DIS) stock price has staged a strong recovery since November as investors cheer the company’s turnaround. The highly-embattled stock plunged to a low of $78.43 in November and has now jumped by 23%, meaning it has entered a bull market.
Disney’s day of reckoning is here
Walt Disney, one of the biggest media companies in the world, will publish its results on Wednesday. These results will provide more color about the state of the company as Bob Iger continues to engineer a turnaround.
The numbers will come at a difficult time for the media industry. Netflix, the biggest streaming company in the world, published strong financial results as it added over 13 million new users. This is notable for Disney since it is also one of the biggest streaming companies through its Hulu and Disney+.
Therefore, investors will want to see whether Disney’s streaming service continued to add more users. The most recent results showed that Disney+ had over 150 million active members, a number that the market wants to increase. Analysts expect that the international expansion of Disney+ will lead to more growth.
There have been other important media news recently, including the ongoing bid for Paramount, the parent company of CBS. Warner Bros. Discovery has also been struggling as its growth slows and as the management works to hit its profits target.
The other important data that will move Disney stock will be the headline figures. Analysts expect the company’s revenue will be $23.7 billion, up from $23.5 billion in the same quarter in 2022. Estimates are that the GAAP earnings per share will be 88 cents, a drop from 99 cents in the previous quarter.
Disney investors are also watching the issue of succession. While Bob Iger has been given an extension until 2026, investors want to ensure that there is a good plan in place. Besides, the previous CEO, Bob Chapek, did not implement well.
A case for Disney can be made. For one, the company’s Disney+ business is expected to narrow its losses while its experiences division is expected to see robust demand. The key challenging businesses are its TV and movie segment which is slowing.
Disney stock price forecast
Turning to the daily chart, we see that the DIS share price has formed a golden cross pattern, where the 200-day and 50-day moving averages make a bullish crossover. The Percentage Price Oscillator (PPO) has moved above the neutral point. Most importantly, the stock has moved above the key resistance point at $96.24, its highest point on November 24th.
Therefore, the outlook for the Disney stock price is bullish, with the initial resistance point to watch being the psychological point at $100. A move above that resistance will see it rise to the key point at $103.60, its highest point on May 8th.
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