Things were looking pretty bright in the Magic Kingdom for a while, as Disney (NYSE:DIS) brought out an earnings report that looked as bright as a sunny morning. But that magic didn’t last, as Disney offered guidance, which soured things enough that shares plunged nearly 10% in Tuesday afternoon’s trading.
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Although the combined forces of Hulu and Disney+ posted a profit for the first time, when ESPN+ got involved, that turned into a loss of $18 million worth. There was also a decline in television and box office revenue. Therefore, Disney’s ability to follow up today’s dazzling show with any kind of encore next quarter looked to be in doubt, as Americans were continuing to cut the cable in favor of a range of streaming alternatives, and that weighed heavily on Disney’s outlook.
It’s a Streaming World After All
For those who believed that streaming would be the future of media, your vindication is, for better or worse, pretty much here. With the Disney+ and Hulu combination turning a profit, linear in decline, and more streaming likely to follow, it’s clear that streaming is becoming vastly preferable for more and more of the American viewing public. Disney itself looks for streaming to pick up profitability in the fourth quarter and ultimately “…be a meaningful future growth driver for the company, with further improvements in profitability in fiscal 2025.”
What Is the Future Price of Disney Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 24 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 2.14% rally in its share price over the past year, the average DIS price target of $128.93 per share implies 22.56% upside potential.
