Is This A Good Time To Buy Disney Stock?

Is This A Good Time To Buy Disney Stock?

Disney share value has plummeted over the past year, reaching its most recent peak at $181.3 at the end of July 2021. The share price towards the end of June and early July of 2022 is only half that, at around $96. This often signals danger ahead but it appears that many stock analysts believe The Walt Disney Company (NASDAQ: DIS) is poised to bounce back.

At least two dozen Wall Street analysts are offering 12-month price targets on Walt Disney Company common stock across the last three months. These analysts advise the average price target is around $150.00 with a high forecast, this week, as much as $240.45 and a low forecast of $94.91.

This gives Disney stock a Moderate Buy rating, with about a third giving a Hold rating.

Typically Strong, But Less Stable Than Usual

Looking at the broader scope as a whole, the past few years paint a more detailed picture of Disney stock activity and why we might expect a rebound. For one, DIS has experienced escalating EPS growth since 2021 at a range of 60 to 80 percent yearly.

That said, closer analysis shows the stock has been less stable over the last four quarters. In fact, actual EPS quarter-by-quarter beat EPS estimates only about half the time. For example, the Q3 2021 EPS of 0.8 beat the estimate of 0.55. However, the following quarter (Q4 2021) the actual EPS of 0.37 charted well below the estimate of 0.52. Things bounced back again in Q1 2022, when the actual EPS of 1.06 came in 50 percent higher than the 0.74 estimate. Then again, in Q2 2022, the actual EPS of 1.08 fell short of the 1.19 estimate.

Current quarter, EPS is at $1 on sales of $21 billion. They are expected to release their next earnings report on August 90, 2022.

The Walt Disney Company Forecast History

DIS forecasts have been mostly good. Actual Earnings Per Share have, for the most part, met or exceeded their analyst estimates. In Quarter 3 of 2021, for example, analysts gave DIS an EPS range of 0.28 to 1.05 with a consensus estimate of 0.55. The actual EPS registered at 0.8

This trend continued into Quarter 4 of 2021. Analysts gave an EPS range of 0.23 to 0.8 with a consensus estimate of 0.52. Sure enough, the actual EPS registered at the median: 0.37

For first-quarter 2022, the EPS range was 0.27 to 3.75 with a consensus estimate of 0.74. This time, the actual EPS of 1.06 significantly beat analyst estimates, even if it was at the lower gauge of the range.

Finally, the most recent quarter had an EPS range of 0.89 to 1.4 with a consensus estimate of 1.19. The actual EPS was an astonishing 38.48, which might explain some analysts enthusiasm to buy the stock now.

Quarterly Growth Temporarily Down but Annual Growth is Solid

In all, the average result for the past year or two shows that quarterly growth is down -7.51 percent. Perhaps, then, annual analyst forecasts are a better measure of strength. For example, the annual EPS estimate for 2018 EPS carried a range of 6.72 to 8.27 with a consensus estimate of 7.00. The actual EPS beat the estimate at 7.08. This trend continued with the actual 5.77 EPS of 2019 beating the estimate of 5.75, and again in 2020 when the actual EPS of 2.02 overshadowed the estimate EPS of 1.53. In 2021, however, the annual EPS estimate range was 2.14 to 2.76 with a consensus estimate of 2.46. The actual EPS of 2.29 did not beat analyst expectations for the first time in many months. However, it still didn't put a damper on overall annual growth rate, which registered at 73.59 percent.

About the Walt Disney Company

The Walt Disney Company, of course, is a global entertainment firm that operates a two-pronged business. First of all, there is Disney Media and Entertainment Distribution. This is the segment of their business that handles their media products like film, television, and music. Secondly, there is Disney Parks. This is the segment of their business that manages their theme parks.

The media company not only produces big-screen films but also direct-to-consumer streaming services through Disney+ and other similar services. This also involves the staging and licensing of live entertainment events as well as post-production services through the Industrial Light & Magic and Skywalker Sound studios.

The theme park company manages the various Disney properties across the globe. This includes not only Disney parks in North America, Asia, and Europe, but also various other in-person experiences including (but not limited to) National Geographic Expeditions, Disney Cruise Line, Adventures by Disney, and the Disney Vacation Club. This segment also manages and maintains various consumer products, which include not just park merchandise but also the licensing of trade names, characters, and visual and literary IP for their various types of merchandise.

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