It’s remarkable how a Disney Company’s outlook may be significantly altered by a dividend increase and some strong quarterly performance. Walt Disney (NYSE: DIS) didn’t appear to be a “Magnificent Seven” darling of the market last year; rather, it was an ageing, struggling business with bleak prospects. But Disney might be the narrative of 2024’s recovery, and I am optimistic about DIS stock right now.
Disney is a global supplier of toys, movies and TV shows, theme parks, streaming services, and more. Even though Disney’s theme park business was negatively impacted by the COVID-19 outbreak, some investors have expressed concern about the company’s unprofitable streaming division in more recent reports.
Furthermore, a well-known activist investor has been essentially breathing down Disney’s neck in an attempt to alter the composition of the board of directors. That’s a lot of pressure for Disney to handle, but maybe some recent announcements from the business, like a partnership with a pop musician you’ll undoubtedly recognize, will allay fears.
A Lot Has Been Happening at Disney Company
It’s amusing to think that DIS stock used to be viewed as a safety investment that was boring and didn’t move much. Disney has been a really interesting corporation lately, with some noteworthy events. You may have also noticed that the stock price has been rising rapidly.
First, let’s address the big issue at hand: Nelson Peltz, an activist investor. Peltz isn’t the world’s biggest admirer of Disney CEO Bob Iger, it’s probably safe to say. Peltz has been trying to acquire a seat on Disney’s board of directors and shake things up in a corporate soap opera that has been going on for a while.
Iger hasn’t only given Peltz a board seat, as one might anticipate. If Disney’s financial results improve, Iger will find it easier to resist Peltz’s demands — but more on that subject in a bit.
In a nutshell, what is the commonality between pop sensation Taylor Swift and Peltz? The reason for their recent media attention stems from their respective roles at Disney. In particular, Disney’s Disney+ Streaming service will shortly host the world premiere of Swift’s concert film from The Eras Tour. This is significant because Disney’s streaming division hasn’t turned a profit, so perhaps Swift’s movie will quickly boost the company’s earnings.
Additionally, a recent alliance between Disney subsidiary ESPN, Fox (NASDAQ: FOX), and Warner Bros. Discovery (NASDAQ: WBD) may significantly benefit Disney’s streaming division. These businesses are collaborating to develop a streaming service with an emphasis on sports. Thus, Disney has yet another chance to boost the revenue and profitability of its streaming business.
Bringing the Dividend Up and Sealing the Gap
DIS stock increased 6% in Wednesday’s after-hours trading for reasons other than the noteworthy Swift news and the sports-streaming arrangement. Disney’s first-quarter fiscal year 2024 profits undoubtedly caught the attention of the market, as did a fantastic opportunity for investors seeking passive income.
These are the fundamentals. Disney recorded sales of $23.5 billion in the first quarter of FY2024, narrowly falling short of the $23.8 billion experts had projected. Disney is also substantially above Wall Street’s average expectation of $0.99 per share with its quarterly adjusted earnings of $1.22 per share.
But this is the finest part. The net loss for Disney’s streaming division decreased significantly from $984 million in the year-earlier quarter to $138 million in the first quarter of fiscal 2024. Disney management also gave an assurance, saying, “We continue to expect to reach profitability at our combined streaming businesses in the fourth quarter of fiscal 2024.”
The company’s next dividend payment, which will be $0.45—a 50% increase over the previous dividend distribution—was finally declared by Disney’s board. As a result, passive income investors may wish to adopt this method and think about using DIS stock in a dividend-reinvestment plan.
Analysts: Is Disney Company Stock a Good Buy?
DIS is rated as a Strong Buy on TipRanks, which is based on 15 Buys and 5 Hold evaluations given by analysts over the previous three months. With an average price objective of $108.29, Disney’s stock has a 9.2% potential upside.
In summary, should you think about buying Disney stock?
How can Disney best prevent activist investors from criticizing it? The solution is to deliver positive profit results to shareholders and express optimism about Disney’s streaming segment’s profitability gap shrinking.
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Investors should also take into account Disney’s increased dividend, the addition of the Swift movie to Disney+, and the new alliance that may establish Disney’s ESPN as the preferred provider of sports streaming content. As a result, I think this is the ideal moment to consider including DIS stock in your portfolio.
The recent significant price increase on the NYSE for The Walt Disney company (NYSE: DIS) attracted a lot of attention. The corporation has been moved in the correct direction by the recent increase in share prices, even though it is still below its annual top. Since the large-cap stock is covered by numerous experts, likely, any announcements that could affect the price have already been taken into account by the stock’s share price. But what if there’s still time to make a purchase? To determine whether the opportunity still exists, we will examine the most recent statistics on Walt Disney’s outlook and valuation today.
See our most recent Walt Disney study here.
What’s the Value of Walt Disney?
Our valuation model indicates that Walt Disney appears to be reasonably valued at 4.9% below our intrinsic value. This implies that you would be paying a fair price if you were to purchase Walt Disney at this time. It’s unlikely that the share price will rise over its current level if you think the company’s real worth is $102.10.
Is there going to be another opportunity to buy low later on? Walt Disney’s stock can drop in value, providing us with a future opportunity to purchase, since its price fluctuations are heightened in comparison to the rest of the market. Its high beta, a reliable gauge of share price volatility, serves as the foundation for this.
What sort of expansion will Walt Disney bring about?
NYSE: DIS Revenue Growth and Earnings February 5, 2024
When considering a stock purchase, the future outlook is crucial, particularly if you’re an investor hoping to expand your portfolio. It’s usually a smart idea to purchase a strong firm at a low price, therefore let’s also look at the company’s projected future growth. Walt Disney’s earnings are predicted to double in the upcoming years, pointing to a very promising future. Stronger cash flows as a result ought to increase share value.
