Disney Stock Dips on Guggenheim Downgrade

This negative price action has DIS breaking below its recent support

Deputy Editor
Jan 14, 2022 at 9:59 AM
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The shares of Walt Disney Co (NYSE:DIS) are down 3% to trade at $150.80 at last glance, after Guggenheim downgraded the stock to "neutral" from "buy" with a price-target cut to $165 from $205. The firm is eyeing the pace of profit growth, as well as the company's direct-to-consumer and parks businesses. 

On the charts, DIS has been slowly climbing since its Dec. 1 annual low of $142.04, and more recently bounced off the $145 level. Today's negative price action has the stock back below the $155 level, however, which has served as a floor since late December, and had previously rejected the stock's rally earlier in the month. The equity has also broken back below its 20-day moving average. 

Further bear notes could provide headwinds for Walt Disney stock. Coming into today, 14 of the 17 analysts in coverage carried a "buy" or better rating, with three a tepid "hold," leaving plenty of room for a shift in sentiment. 

Options traders, in the other hand, have been much more optimistic. This is per the security's 50-day call/put volume ratio of 3.16 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 81% of readings from the past year. 

That said, speculating on DIS' next move with options could be a prudent play. The stock's Schaeffer's Volatility Index (SVI) of 23% stands higher than just 13% of all other readings in its annual range, implying that options players are pricing in low volatility expectations at the moment. 

It's also worth pointing out that Disney stock ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 16 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.


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