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Should you buy Disney stock ahead of Q4 earnings?


The Walt Disney (NYSE: DIS) stock price has been in a narrow range in the past few weeks. This could change on Thursday when the company publishes its quarterly results. Its stock is trading at $176, which is about 13% below its highest level this year.

Disney earnings ahead

Disney experienced mixed fortunes during the Covid-19 pandemic. On the positive side, the company saw rising demand for its streaming services like Disney+ and Hulu. 

At the same time, the company was hit hard as the pandemic led to a shutdown of its theme parks, cruise ships, and retail outlets. In all, the company’s revenue declined from $69 billion in 2019 to more than $65 billion in 2020.

Things have changed this year. While the company has reopened some of its theme parks, it has seen a slowdown in its Disney+ business. Also, the reopening was relatively slower than what most analysts were expecting.

Therefore, the Disney stock price will be in the spotlight on Thursday as it publishes its results. Data compiled by SeekingAlpha shows that analysts expect that the company’s revenue rose to more than $18 billion in the fourth quarter. 

This will be a better performance than the previous quarter’s revenue of about $17 billion. Going by history, Disney has a good track record of beating analysts forecasts. Also, since more than 80% of S&P 500 companies have beaten Wall Street estimates, there is a likelihood that it will do good as well. 

Still, the top and bottom-line numbers will not be the only movers of the Disney stock. Instead, investors will watch the trends in Disney+. In the fiscal third quarter, the company reported that Disney+ had $116 million subscribers. This was a substantial growth for a product that was launched a few years ago. Therefore, judging by the positive Netflix earnings, the company will likely report better results.

Disney stock price forecast

The daily chart shows that the Disney stock has been moving sideways in the past few weeks. It has remained between the support and resistance levels at $168 and $186. The stock is also along the middle line of the Bollinger Bands. It has also made a small bullish gap. 

Therefore, the stock will likely rise sharply after earnings. If this happens, the key level to watch will be at $186, which is about 6.7% above the current level.

The post Should you buy Disney stock ahead of Q4 earnings? appeared first on Invezz.

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