2019-11-14 • Updated
The earnings season in the United States is still on. This week, we’ll hear from Walt Disney. The company will release its financial results on Thursday, November 7. The earnings webcast will start at 23:30 MT time. Let’s have a look at the fundamental and technical picture for this stock.
EPS forecast: $0.95B
Revenue forecast: $19.29B
Wall Street analysts expect that Disney’s earnings declined by 35.8% y/y, while revenue, on the contrary, went up by 33% y/y. In the previous quarter, the firm’s profit took a blow as continued to digest the purchase of 21st Century Fox.
Investors will likely pay special attention to the company’s forecasts for the upcoming quarter as important events are to take place: the launch of the Disney+ streaming service in November and the premiere of a new Star Wars film in December. The House of Mouse had to spend a lot on Disney+ online-video app, so market players will want to know how soon the company expects this investment to pay off. So far, the picture looks good: according to TechCrunch, Disney+ has over 1 million subscribers even before the launch.
Still, the competition in the streaming industry is very fierce: there are Netflix, Amazon, Apple, and others. Analysts have already come up with the term “streaming wars” that describes the situation pretty good. These companies have entered a fight for subscribers with the subscription price and the variety of content as the main weapons. Disney is very strong when it comes to content. It has its signature movies and TV shows, including Marvel, Star Wars, and Pixar titles. The service will appeal to families with children and to many others, there can be no doubt. Apple TV+ costs cheaper than Disney+ ($5 a month versus $7 a month), but it has much less to offer viewers for that money.
All in all, Disney is well-positioned for success in the streaming battles. The big question is how soon it will start to bear fruit from its efforts to challenge the dominance of Netflix (which, by the way, has a popular subscription plan that costs about $12). Investors obviously need encouragement and some new and impressive outlook from Disney’s management in order to hurry up and pile into the stock.
The stock had a very impressive start of the year, but then topped above $147 at the end of July and has been forming lower highs ever since. Resistance lies at $136.60 (100-day MA). Above this point, buyers will become stronger and will get a chance to push the price up to $140.00 (September high), and $142.30 (April high). Support is at $129.25 (200-day MA) and 126.35 (April 12 low; 50-week MA). The decline below the latter will open the way down to $120.
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