Worst Day on Wall Street for Disney Since 2020 after Earnings Report, DIS Stock Down 7%

UTC by Bhushan Akolkar · 3 min read
Worst Day on Wall Street for Disney Since 2020 after Earnings Report, DIS Stock Down 7%
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The Disney+ subscriber growth has slowed down putting downward pressure on the stock price. Analysts share mixed views on the Disney stock.

On Thursday, November 11, shares of the Walt Disney Company (NYSE: DIS) plummeted 7% on the company’s worst day on Wall Street since June 2020. The stock reaction was in response to the media giant’s disappointing earnings report. 

Worst Day for Disney

Thursday’s prices crash of the DIS stock has pushed it further into the bear zone. Besides, the stock is also down almost 20% since its high in March 2021. The company has also reported a slowdown in its subscriber growth for its streaming service.

Earlier this week on Wednesday, November 10, the Disney+ streaming subscription earnings stood at 37 cents per share with a revenue of $18.53 billion. This was much lower than the forecasted 52 cents per share and the revenue of $18.8 billion.

Disney+ also added 2.1 million subscribers totaling 118.1 million. But it was still lower than the expected 126.2 million. The Disney+ streaming service served as a key revenue driver during the pandemic as people were stuck at home.

The good thing is that Disney+ has got some good movies and shows under the belt. However, it delayed the upcoming Marvel movie releases including “Doctor Strange in the Multiverse of Madness,” “Thor: Love and Thunder” and “Black Panther: Wakanda Forever” citing production issues.

Market Analysts Share Different Views for the DIS Stock

Fairlead Strategies founder Katie Stockton referred to Thursday’s price correction as a “shakeout”. Stockton also called it a chance to buy Disney (DIS) at a discount. Speaking to CNBC, Stockton added:

“A shakeout is essentially a false breakdown and this is actually kind of an exciting move for me to see from Disney because it’s been such a laggard since March. Into this gap down we have obviously emotionally-charged selling, it could be a selling climax of sorts especially with the volume running heavy.”

Explaining the technical levels further, Stockton said:

“There is support on the chart between about $153 and $155 and the next resistance is up around the 200-day moving average. So I think it’s somewhat compelling, albeit not exactly risk-free, to add into this kind of weakness”.

Piper Sandler chief market technician Craig Johnson thinks that there’s more weakness in the stock. He expects further downfall for the DIS stock and would wait for fresh buying. “Mickey Mouse never goes out of style, but in terms of the chart here today, I want to wait for them to go on clearance a little bit further. It’s in a well-defined downtrend in our work. I think we will have an opportunity to buy it lower than where it is here in the next couple of weeks or months”.

In a note to clients, JPMorgan analyst Alexia Quadrani said that she’s confident of Disney hitting its 2024 target of 230 million to 260 million Disney+ subscribers.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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