Disney stocks go against the tide
Disney stocks go against the tide
Fintech

Disney stocks go against the tide

By George Michael Belardinelli - 12 Feb 2022

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The week that is drawing to a close has been crucial for the entire global equity sector and the American one in particular. With inflation at 7.5% and rising according to all analysts (government and non-government), the Nasdaq and the S&P 500 crashed. In this context, which entails a smoky vision that is certainly not reassuring for the future, due in part to the energy crisis and tensions between the USA, China, and Russia, some stocks are going against the tide, such as Disney and shares in the banking sector.

Banks resist the winds of crisis

At least for the majors, one sector that seems to be resisting better to an increasingly bearish market, drowned out by inflation aiming at double digits, is the banking one. 

Wells Fargo, JP Morgan, and Banks of America are not in the red and show how the banking sector can withstand the blows of the market and adapt more quickly. 

This trend is comforted by the fact that although inflation figures are worrying, employment figures are holding up well and bode well for the future. There is, at least in America, no imminent labor market crisis. 

Disney stocks on the rise

The stock that most of all, however, is a countertrend, and that we could compare to a salmon that goes up the current of the down markets, is Disney, +3,35% in the last closing and even +8,65% this week. 

Accomplice to the release of the quarterly figures that see the company greatly outperforming expectations, the stock is experiencing daily gains between 5 and 8%, including the opening forecast.

Futures are also positive, and all analysts see a bright future for the company due to the training of restrictive measures due to the pandemic that allows greater mobility of people with high earnings in the entertainment parks sector for which it is a leader worldwide.

Disney
The theme parks also drag Disney

The data that drags Disney

The data released shows how Disney exceeded all expectations in each quarter: 

  • +202,35% Q2 2021, 
  • +45,48% Q3 2021, 
  • – 23.41% Q4 2021 (the only negative quarter due to the beginning of the crisis in the markets and the black December in streaming),
  •  Q1 2022 records +67.24%.

The entertainment house increased profit margin, revenue (to $18.53 billion), and net income (to $160 million) compared to direct rivals Netflix and Amazon that mark red. 

Subscribers reached 130 million, beating analysts’ estimates of 125 million as a target; in the last quarter alone, they grew by a record 12 million for the sector. 

Theme parks have also been a strong driver, Ehrlich said: 

“A big premise of our bullish thesis was based on the reopening of theme parks and the operating leverage inherent in the model; the fiscal first-quarter results are a key validation of this view.” 

Benjamin Swinburne (Morgan Stanley) added to the rosy view by stating that park revenues and margins were near record levels and bode well for the future. 

All analysts’ recommendations agree that the stock is in good health. For Bank of America, it is a Buy with a target price at $191; for Morgan Stanley, it is overweight with a price target at $170 and Keybank but with a target at $216.

Excellent news also from the Adv point of view: the CFO Christine McCarthy, in fact, pointed out that there has been a robust demand for advertising sponsorship (direct to consumer) for the company’s businesses. Disney is against the tide in short and firmly in the green for the future, at least according to expectations. 

George Michael Belardinelli

A former corporate manager at Carifac Spa and later at Veneto Banca Scpa, blogger and Rhumière, over the years he has become passionate about philosophy and the opportunities that innovation and the media make available to us, in particular the metaverse and augmented reality

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