Walt Disney: review and forecasts

Walt Disney, stock, Walt Disney: review and forecasts

The company has the same influence on the entertainment business as Coca-Cola on the sale of carbonated drinks and Apple on the development of mobile gadgets.

Walt Disney is the undisputed global leader in the entertainment industry. This company is considered one of the most expensive brands in the world with high production performance and high growth rates.

The company's business once started as a film studio, but is now widely diversified both in terms of geography and business segments.

The company operates in more than 170 countries and employs more than 200,000 people. The company owns 1,300 TV channels, including the most famous ABC and Disney Channel.

For a long time, amusement parks were considered one of the main areas of business that generates income. But in recent years, the corporation's focus has shifted to the world of movies and streaming services.

The issuer's subsidiary, Walt Disney Studios, produces and releases video content. The Walt Disney Studio produces not only cartoons, but also films and TV series for different age categories of viewers.

Did you know that this company owns the latest episodes of the movie "Star Wars", as well as films about the superhero Marvel?

A subsidiary of Disco Music Group develops audio for studio production.


How the film empire was born

In the spring of 2019, the transmitter acquired all of 21st Century Fox's media assets. Disney then becomes the largest media center on both sides of the Atlantic.

Prior to this purchase, Disney already owned Pixar, owned the rights to Marvel superheroes and the Star Wars franchise, but with the acquisition of 21st Century Fox, the company's film family was expanded to include the X-Men, the Fantastic Four, and Deadpool.

Through the deal, Disney gained access to Fox television networks such as FX Networks and National Geographic, as well as the streaming platform Hulu.

Disney already had its own streaming service, Disney+, which, along with Hulu, was a blow to its direct competitor, Netflix.

In December 2020, the number of Disney + subscribers exceeded 85 million. Note that in October, the number of subscribers was about 73.7 million, and in early August – 60.5 million. The company's streaming services, including Disney+, Hotstar, Hulu and ESPN+, have more than 137 million subscribers.

This year, Disney+ intends to expand its presence in the markets of Eastern Europe, South Korea, Hong Kong and other countries.

Disney+ plans to reach 230-260 million subscribers by 2024. By comparison, Netflix has 195 million subscribers.

Last fall, Walt Disney announced a restructuring of its media and entertainment segments. The company's management decided to separate development and production from distribution. This should help the company respond more quickly to the changing needs and interests of the viewer.

Now three groups will be engaged in the production of video content. The film will be produced by companies such as Lucasfilm, Pixar, Marvel, 20th Century Studios and Disney Studios. Cable channels such as BBC News, National Geographic, will be included in the group of entertainment TV channels. A separate last segment of video content is sports.

All video content will be distributed by a specially created Disney subsidiary. Streaming services will be a priority.


Post-pandemic recovery

The corporation did not sit idle during the lockdown and was engaged not only in the media service, but also in preparing parks for the summer season. So, California Disneyland has undergone a number of changes and improvements.

In June, the park will open a new theme area "The Avengers" with the attraction "Spider-Man", where the actors dress up as superheroes.

The media company has signed a long-term agreement with the National Football League that will further enhance the appeal of its ESPN and ABC networks and the ESPN + streaming service. In late winter, the issuer also strengthened its influence in the Disney + segment in the international market, bringing its Star brand to an international audience.

Last year, it was movies and TV shows, as well as TV broadcasts, that helped the company avoid serious losses during the quarantine at amusement parks. After successful vaccinations, amusement parks began opening in the United States, which should improve the issuer's financial results by the end of the year.


Walt Disney, 1H chart


Buy or sell Walt Disney stock?


The issuer's net income for the first quarter of the new fiscal year was $17 million, or US $0.2 per share. A year earlier, that figure was $2.107 billion, or $1.17 per share. Adjusted earnings fell to $0.32 from $1.53.

On the other hand, the media company's revenue increased to $16.20 billion from the previous value of $15.8 billion.

Despite the positive report, the company's shares remained under pressure. The correction began in March, and so far buyers have not managed to turn the situation in their favor. So far, they've managed to keep their defenses within $180, gathering the strength to jump in.

The good news is that the company has a better chance of improving inventory and inventory in the second quarter. Successful vaccinations in the United States will fill amusement parks, and combined with the success of Disney+, the second half of the year will clearly end in a positive zone.

The buy signal will be a close above $185-190. The medium-term target is $200, the long-term target is the $230 resistance level.

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