Disney Stock Has a Lot to Prove, One Analyst Says

Things are constantly changing with Disney World, Disneyland, Disney Cruise Line, and other aspects of The Walt Disney Company.

Disney World

From time to time, we get some updates about how some of these changes have impacted the Company financially and what potential new changes might be on the horizon. We’re about to get more of those updates soon with Disney’s upcoming quarterly earnings call. And two days ahead of the call, things are changing with Disney’s stock.

Back in December, Disney’s stock was at an all-time high and it retained high levels after the announcement of LOTS of new movies and shows during its Investor Day conference. At that point, Disney stock was trading at around $178.16.

Welcome to Disney World!

Last month, one analyst upgraded Disney’s stock based on their streaming success and the potential impact of the COVID-19 vaccines on Disney’s businesses. The analyst also raised the stock price target from $155 to $200. At that time, Disney’s stock was trading at around $172.68.

Runaway Railway

Yesterday, Disney’s stock closed at $190. And today, just two days before the earnings call, the stock is trading at just under that according to Yahoo! Finance. Right now, the stock is trading at around $188.42.

Screenshot from Yahoo! Finance

While the stock might be trading pretty high at the moment, one analyst for The Motley Fool notes that Disney stock has a lot to prove. The article from The Motley Fool notes that there’s a lot riding on this report of the first fiscal quarter, but shares that Disney isn’t at its best right now. The analyst notes that there’s only a slim chance Disney is “back in black on the bottom line” as shuttered attractions and rising costs to keep Disney+ going will cut into positive net income elsewhere.

Spaceship Earth

But, these results are, in fact, somewhat what Disney has predicted. During the last earnings call, one Disney executive noted several things that would likely impact Disney’s financial results in the first quarter for fiscal year 2021. First, Disneyland was then expected to remain closed throughout 2020, which has indeed been the case. But, some spots on Buena Vista Street have now reopened (again) and a new, special ticketed event has been announced for the future.

Disney California Adventure Carthay Circle

Additionally, some international Disney theme parks remain closed, Disney didn’t have any significant theatrical releases planned for Q1, and home entertainment and other areas were all expected to be lower in terms of results or otherwise adversely impacted.

But, the Motley Fool article notes that it’s okay if this first fiscal quarter was challenging as investors have their eye on the prize. Disney shares have MORE than DOUBLED since they hit their low point 11 months ago. And the analyst notes that he thinks “Disney will bounce back.” For investors, the Motley Fool notes that Disney+ numbers might matter more than the empire as a whole. They’ll likely want to know how the streaming service has done in light of season 2 of The Mandalorian and the premiere of WandaVision.

WandaVision Photo Op

During Disney’s last earnings call back in November, we got to hear about the Company’s financial status as well as some big updates, like that Disney World had increased capacity.

We’ll definitely be tuning in to the call to see what updates are provided about financial matters and other things affecting the parks and more. So, be sure to come back to see what important things are announced.