Update – November 10, 2022
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Shares of Walt Disney (NYSE:DIS) declined more than 13.2% on Wednesday to close at $86.75 after the company reported losses in its streaming business.
Walt Disney has witnessed hefty losses in Disney+, which pulled down overall earnings for the fourth quarter of the Fiscal Year 2022. The bottom line figures missed analysts’ estimates by a wide margin.
The segment reported an operating loss of $1.47 billion for the quarter, up considerably from $630 million in the prior-year quarter. Elevated programming and production costs, along with increased marketing and technology costs, led to the upside.
Nevertheless, the company saw some respite in the form of higher subscriber revenues as Disney+ paid subscribers grew 39% to 164.2 million.
Disney is of the opinion that losses in the streaming business have reached a “peak,” following which they are likely to start falling. The company forecasts this on the basis of its three-step plan, which includes the introduction of the Disney+ ad tier in the next month, a cut in marketing expenses, and streamlining of content and distribution approach.
What is the Good Price for Disney Stock?
The average Disney stock price target of $128 implies upside potential of 47.55%. The stock has a Strong Buy consensus rating based on 15 Buys and four Holds.
