Fall in Disney’s stock price
On August 1, 2016, The Walt Disney Company’s (DIS) stock closed at $95.54. The company’s stock price has fallen by 10.2% year-to-date (or YTD) and 7.5% in the past three months.
In contrast, the stock prices of media companies Comcast (CMCSA) and Time Warner (TWX) have risen by 19.1% and 19.1%, respectively, YTD. 21st Century Fox’s (FOXA) stock price has fallen by 2.3% YTD. Disney is expected to announce its fiscal 3Q16 results on August 9, 2016.
Factors that could be affecting Disney’s stock price performance
Disney’s stock was recently downgraded by FBR Capital and Stifel. According to a The Street report citing Barron’s from late last month, FBR downgraded Disney’s stock from “outperform” to “market perform.” Stifel has also downgraded Disney’s stock from a “buy” to a “hold.”
Disney’s results last quarter disappointed investors. The company reported adjusted EPS (earnings per share) of $1.36, 2.9% short of Wall Street analysts’ consensus estimate of $1.40. Another cause for worry: Disney’s ESPN business has been steadily losing subscribers. ESPN saw its number of subscribers fall from around 99 million in 2013 to 92 million in 2015.
In this series…
In this series, we’ll look at what factors are likely to impact the company’s performance in the long term. We’ll look at Disney’s Media Networks segment and how Disney intends to stem subscriber losses for ESPN. We’ll also look at Disney’s outlook for its business segments, including its theme parks and studio entertainment, and why the company is changing its business strategy for its ABC Network.
We’ll begin by looking at analysts’ recommendations and target prices for Disney in the next article.