Disney’s Stock Fell Again Yesterday But Wall Street Has Reasons For Optimism
The Walt Disney Company delivered its Q3 earnings report yesterday, beating Wall Street expectations and delivering profitability in streaming for the first time.
For years, all eyes have been on Disney CEO Bob Iger as he attempted to prove that streaming could be a growth business for the company. Upon his return in November of 2022, Iger radically changed Disney’s streaming strategy. After years of hemorrhaging money to grow its subscriber count, Iger told investors that profitability would be the company’s benchmark, not subscribers.
To that end, the CEO promised that Disney would hit profitability in streaming by Q4 of 2024.
![Bob Iger](https://mickeyblog.com/wp-content/uploads/2024/04/240403-Bob-Iger-ew-412p-5d1ef7.webp)
![Bob Iger](https://mickeyblog.com/wp-content/uploads/2024/04/240403-Bob-Iger-ew-412p-5d1ef7.webp)
NBC News
Yesterday, Disney announced it had reached that goal ahead of schedule, ending Q3 with its direct-to-consumer businesses in the black.
Despite Disney’s promising results, however, the company’s stock continued to slide yesterday. What happened?
![Walt Disney Company](https://mickeyblog.com/wp-content/uploads/2024/05/081612_Launch_Img2.jpg)
![Walt Disney Company](https://mickeyblog.com/wp-content/uploads/2024/05/081612_Launch_Img2.jpg)
Walt Disney Company
The Disney Parks Struggled Last Quarter
While Disney Entertainment delivered a sparkling quarter for the company, the same was not true of the Disney Experiences division.
The Disney theme parks, which have been the company’s golden goose over the last couple of years, did not reach attendance projections and saw operating income decline.
Based on the Disney Experiences report, Seaport Research analyst downgraded Disney stock from Buy to Neutral.
“Using a variety of methodologies, we see a range of $94-$117 a share making more sense, but…we do not expect catalysts in the near-term to drive up sentiment yet,” Joyce wrote.
The fear for Wall Street is that broader economic conditions will prologue the Disney Parks’ struggles.
Disney Has Reasons to Be Optimistic
While Disney’s stock closed down 4.5% from the previous day following its earnings report, the company has reason to be optimistic.
![Anxiety really wants to push that button in Inside Out 2.](https://mickeyblog.com/wp-content/uploads/2024/06/insideout2dontpushthat.jpg)
![Anxiety really wants to push that button in Inside Out 2.](https://mickeyblog.com/wp-content/uploads/2024/06/insideout2dontpushthat.jpg)
Image: Pixar
After a difficult 2023, Disney is once again the box office king, with both Inside Out 2 and Deadpool & Wolverine proving to be blockbusters. With Moana 2 and Mufasa: The Lion King on the horizon, Disney’s theatrical unit is in a great place.
Additionally, with Disney now delivering profitability in streaming, an ESPN direct-to-consumer product on the way, and Venu Sports set to launch this fall, Disney’s Achilles heel has become a strength.
![Disney+](https://mickeyblog.com/wp-content/uploads/2023/12/Disney-Pauline-1024x681.jpg)
![Disney+](https://mickeyblog.com/wp-content/uploads/2023/12/Disney-Pauline-1024x681.jpg)
(Photo Illustration by Mateusz Slodkowski/SOPA Images/LightRocket via Getty Images)
With Disney seemingly primed to announce a slew of new projects for the Disney Parks at D23: The Ultimate Fan Event this weekend, the company can drive attendance to the parks.
If they can do that, investors should have every reason to be optimistic.
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