Rough Day for Walt Disney Stock Amid Streaming Costs

Analysts are cutting their price targets after the company's lackluster fiscal fourth-quarter results

Deputy Editor
Nov 9, 2022 at 10:39 AM
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Walt Disney Co (NYSE:DIS) stock is plummeting to its lowest levels since March of 2020, down 10.8% at $89.03 at last glance. The blue-chip entertainment giant poured billions into its streaming service, Disney+, in an effort to compete with Netflix (NFLX) and other services; and though the number of subscribers surpassed estimates this quarter, investors are focused on the $1.5 billion loss in the direct-to-consumer unit from the streaming costs, which contributed to Walt Disney's fiscal fourth quarter results miss. 

A host of bear notes is weighing on the security as well. No fewer than 13 analysts slashed their price targets today, with the lowest from Cowen and Company to $94 from $124. The brokerage bunch is still heavily bullish, however, with 17 of the 21 in coverage carrying a "buy" or better rating on the stock, while the 12-month consensus price target of $130.68 sits at a 36.4% premium to current levels. 

DIS options are flying off the shelves today, with overall volume running at eight times the intraday average. So far, 103,000 calls and 76,000 puts have crossed the tape. The weekly 11/11 88-strike put is the most popular, with new positions being opened there. It's also worth noting that the stock has landed on the short sell restricted (SSR) list today amid the negative price action.  

Long-term pressure at the descending 180-day moving average has helped guide the shares lower over the past year, and today's bear gap has DIS breaking below the $90 level, which has provided support for pullbacks since July. Year-to-date, the equity is down 42.1%. 

 

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