Is Disney a buy?

It’s time to break down a well known global brand. Here is the breakdown on $DIS otherwise known best as Disney.

Current Price: $135.60

52/Wk High: $153.41

52/Wk Low: $79.07

Read below for the breakdown!

Disney is one of the most well-known entertainment names in the game with four core business segments.

Those four core lines of business include Studio Entertainment, Media Networks, Direct to consumer/International, and finally Park Experiences and Products.

According to TREFIS (@trefis) the stock price can be broken down into four main parts. Currently, 37.0% of the stock price is based on Direct to Consumer & International business.

When breaking the stock price itself down further Parks, Experience and Products represent 27.5% of the stock price. Lastly, Media Networks represent 23.0% of the stock price, and Disney Studios represent 12.5%.

When further analyzing the stock, $DIS currently trades at a price to earnings ratio of -182.89 and does not offer a dividend.

Due to COVID-19 Disney has taken major hits to earnings and the last reported quarter definitely represented that.

While $DIS did report a beat, earnings were still down massively since Q1 of 2020. For reference, the Q1 reported EPS was $1.53 while the Q3 EPS was a minuscule $0.08.

Getting into the Q3 report, $DIS did report a beat off of the ultra-low expectations. Disney reported a Q3 EPS of $0.08 versus the expected EPS consensus of $-0.64.

Not only that but revenue came in at a very low $11.8 billion compared to the Q1 revenue of $20.9 billion.

Digging further into Disney’s financial standing COVID-19 took a toll on the financial end of things. When last reported Disney has a total debt of $64.73 billion.

On the bright side, Disney has built a solid cash on hand level of $23.115 billion as of June 30th.

Many investors and analysts are undecided on $DIS given the chances of a second wave of COVID-19.

Currently, the average price target for $DIS is a flat $130.22/share, representing an unfortunate -3.82% loss. On the otherhand newer targets have been made.

Currently, the high price target is $150.00/share representing a 10.79% upside but the low price target is $97.00/share, representing a -28.36% loss.

The big money also seems to be unsure about $DIS. Currently, 64.42% of Disney is owned by institutions. Top holders include BlackRock Institutional Trust, BofA Global Research, and Fidelity Management & Research.

Taking a look at the charts the six-month charts give traders mixed signals. The six months RSI is currently 65.97 which is quite high, but as we know RSI is not everything.

Furthermore, the six-month MACD sits around 3.21 and is showing no signs of significant upward or downward momentum. Finally, the six-month CCI sits at a high 148.93 due to its recent multi-week rally off COVID-19 lows.

Given that the 52/Wk high for $DIS is $153.41/share, the stock only trades $17.81 off its highs.

It is also worth noting that while earnings have not been stellar, Disney announced that Disney Plus reached 60.5 million paid subscribers during Q3.

In total, I like $DIS long term, given the fact that COVID-19 will not be around forever, sports are coming back, and Disney Plus continues to grow.

On the otherhand, in the short to mid-term, I urge caution and if you are planning on jumping in I recommend a close stop.


Disclaimer: This is not direct financial advice, simply opinion based on independent research. Luke Donay nor Running With The Money is responsible for any trade made based on the published information.