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What Factors Are Weighing on Disney’s Stock Price?

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Fall in Disney’s stock price

On May 25, The Walt Disney Company’s (DIS) stock price closed at $99.82. The company’s stock price has fallen by 6.5% year-to-date and 4.5% in the past month. In contrast, stock prices of media companies Comcast (CMCSA), 21st Century Fox (FOXA), and Time Warner (TWX) rose by 10.4%, 5.9%, and 13.8%, respectively, year-to-date.

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Factors that could be impacting Disney’s stock price performance

Disney’s fiscal 2Q16 results disappointed investors. The company reported adjusted EPS (earnings per share) of $1.36, which fell 2.9% short of Wall Street analysts’ consensus estimate of $1.40. Another cause for worry has been that Disney’s ESPN has been steadily losing subscribers. Disney’s ESPN saw its number of subscribers fall from around 99 million in 2013 to 92 million in 2015. However, Disney stated recently that there as been an upswing in ESPN subscribers as the channel is being included in skinny bundles such as Dish Network’s (DISH) Sling TV.

In this series

In this series, we’ll look at what factors are likely to impact the company’s performance in the long term, and why Disney’s ABC Network is becoming an important asset for the company. We’ll also look at Disney’s return on invested capital, a key profitability ratio.

Disney makes up 0.83% of the SPDR S&P 500 ETF (SPY). 3.5% of SPY’s holdings are in the computer sector. We’ll begin by looking at analyst recommendations and target prices for Disney in the next part of this series.

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