The Walt Disney Company (DIS) Report: Miracles take time.
Disney operates in three main segments. The first of these is Media Networks where the company’s channels, ESPN, ABC, Disney Channel are located. Secondly, Disney’s stores in Disneyland Paris, Hong Kong, Shanghai’s big parks, and finally Walt Disney Studios, Marvel Studios, Disney Music Groups, where they work with the franchise system.
The most significant development of the company in the last year was the acquisition of 21st Century Fox Film and Television Studios by 718 billion USD in June 2018. In this way, the company obtained the broadcasting rights of X-Men, Avatar, Simpsons, National Geographic, etc.
When we look at the first quarter balance sheet of the company for the first quarter of February 2019, we see $ 1.86 earning per share which is above the expectations of $ 1.54. On the side of revenues, we see it is above 0.99% of the expectations.
We can see that the details that need attention are in the Media Network and Studio Entertainment items. These items have a 7% increase and a 27% decline. The decline in revenue in the first quarter of 2019 may be due to the attack on Netflix and other streaming platforms. The second quarter is expected to be announced on 7 May.
One of the news that can positively affect the company is the strong growth of IMAX in China. IMAX Box Office performance in the Chinese New Year increased by 40% compared to last year. The biggest reason for this is that Disney’s Marvel Studios films are in great demand in China as well as the rest of the world. IMAX China Holding, Inc. made a statement that this momentum will continue until the end of 2019. Finally, 20th Century Fox, Disney’s latest film Alita: The Angel of War, broke a record in China with 78 Million USD worth of box office. On the other hand, Disney will soon release a service called Disney + and recently announced that all Marvel series will be included in this service.
Finally, we can talk about Netflix, one of Disney’s competitor. – We made a great profit last year –
BBC and ITV are planning to publish a rival platform to Netflix called Britbox. For the platform to be released in the second half of 2019, BBC says that 43% of internet users in the UK are interested in subscribing to BritBox, which we think is a high percentage. The Streaming market appears to be moving in the coming months. On the other hand, when we look at the Oscar Awards, the production of a Netflix film, ’Rome‘, was a candidate for the best film and best director awards with two prestigious awards. Couldn’t get the best film award; but the best director went to Rome. The Academy may begin to consider Netflix productions for the best movie in the coming years. Netflix, on the other hand, is not currently a film maker, but a streaming service. It is not easy to see Netflix to be 21st Century Fox in the short term.
Compared to US 10 Y Bonds – 2.75-, Disney’s P/E is 16.44% .
Financial results of the company are above the sector average
On the Weekly Chart, Stock broke the triangle and completed its correction. 110 $ acts as strong support.
On the daily chart, DIS is printing an Inverse Head & Shoulders Pattern. The breakout of neckline – 115.10 $- may trigger the bullish movement.
We plan to buy DIS
- At a potential pullback towards 110 $ – Stop 107–
- At the Breakout of 115.10 $ – Stop below 110 $ –
117 $ / Reached
126 $ / Reached
( Hold period for the ultimate target : 2-4 Months )
Update: As we said, miracles need time. We have reached our first target. 115.50 key level is broken. Breakout of 117.20 will trigger the bullish move.
Update: We have reached the target. The first big trade of the year.
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