In case you missed it, Walt Disney Co (DIS) just reported a $20.15B revenue in Q3, which is 9% higher than its gains in the same time last year BUT is still lower than the $21.3B figure that analysts were looking for. Yikes!
Earnings weren’t much help either, as it fell to 30 cents per share when markets were pricing in 51 cents per share after industry-related factors were removed. Double yikes!
A closer look showed that losses at Disney’s direct-to-consumer arm, driven by Disney+, more than doubled thanks to lower ad revenue and higher costs of creating content and expanding its global reach.
Walt Disney Co (DIS): Weekly
Before you turn to the dark side, however, you should know that Disney+ also added an additional 12.1 million subscribers when markets only expected an 8.8 million net addition. Including subscriptions to ESPN+ and Hulu, this brings Disney’s subscribers to 235 million around the globe against Netflix’s 223 million.
Profit at Disney Parks, Experiences and Products also look promising with the price increases and holiday season coming up.
Christine M. McCarthy, Disney’s chief financial officer, reassured that we’ve seen the company’s “peak losses” and that we could see growth next year “assuming we do not see a meaningful shift in the macroeconomic climate.”
CAN Disney turn profits as soon as its officials are suggesting? DIS share prices are currently saying “that’s sus” as it drops below the 100.00 mark to test the 99.00 zone.
As you can see, 99.00 is not too far from the 91.00 area that has been supporting DIS bulls since 2015.
Stochastic is also showing a bearish divergence from prices as it shows higher highs while price continues to bounce from the 91.00 support.
Look out for consistent trading back above 100.00, which could push DIS to its 110.00 inflection point if not its 120.00 previous highs.
More downside action, on the other hand, could result in a retest of the big 91.00 support zone.
What do you think? Has DIS seen its last downswing this year? Or will it retest lower levels before finding consistent buyers?
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