Walt Disney (NYSE:DIS) stock has fallen into a correction in recent months as investors remain concerned about the company’s growth. It has dropped more than 11% from its high this year.
Goldman Sachs Remains Upbeat About Disney Stock
Goldman Sachs analysts believe that Disney is a compelling buy at the current levels. In a recent note, Michael Ng said that he was optimistic on everything from theme parks to sports and businesses in between. He wrote:
"We continue to view Disney as a multi-year earnings compounder and believe the company is in the early stages of a broader product and Experiences investment cycle."
The analyst maintained a bullish outlook for the company, placing a target of $140, up by 37% from the current level. Other analysts are bullish on the company, with Guggenheim’s Michael Morris reiterating his buy rating with a target of $120.
Wells Fargo’s Steven Cahall boosted his rating to overweight and raised the target from $125 to $132, while Argus’ Joseph Bonner hiked to $134.
Analysts boosted their ratings after the company published encouraging earnings. Its experiences segment generated more than $9.97 billion in revenue, up 10% year over year, while its entertainment streaming business rose 11% to $5.53 billion.
The streaming business, which includes Hulu and Disney+, benefited as subscribers jumped and price increases continued. Disney’s sports business also continued growing, with its revenue rising by 4% to $4.5 billion.
The upcoming earnings report is expected to move to $25.17 billion, up by 12% in the same period last year. Its earnings per share is expected to move to $1.69 from $1.11 a year earlier.
Disney has also become relatively undervalued, with its forward price-to-earnings ratio being at 14.7, much lower than the S&P 500 Index’s average of 19 and its five-year average of 23.
Walt Disney Share Price Technical Analysis
The daily chart shows that the DIS stock has rebounded in the past few months. It jumped from a low of $92.48 in July to a high of $111.91 on August 24.
A closer look shows that the stock has moved below the 50-day Exponential Moving Average (EMA). Also, it has moved below the Supertrend indicator, which is a bearish sign in technical analysis.
On the positive side, the stock has formed a bullish flag pattern, which is made up of a vertical line and a descending channel. This flag section resembles a falling wedge pattern. Therefore, the stock will likely rebound, potentially to $111.91, its highest point in August. A move above that price will point to more gains.
Image: Shutterstock
Login to comment