Walt Disney Co (NYSE: DIS)
Disney, known to be one of the sure bets on the market, isn’t looking to hot lately. Unfortunately, the stock is feeling the pain and has been for more than a month at this point. As a result, many investors are starting to ask whether or not we’re starting to reach the bottom of the downward movement. With a movie that’s breaking box office records and the ability to capture the imaginations of consumers, it only makes sense that this stock will climb again. The only question is, “When?” Today, I’ll let you know my opinion on DIS and what we can expect to see moving forward.
My Opinion On Disney Stock
Disney is, and has been, one of my favorite stocks on the market for quite some time. The company is incredible. While other companies, like Universal, have tried to capture the imaginations of consumers young and old, none have been able to do so quite as well as Disney. So, overall, I’m very bullish on the stock. However, in the short term, more volatility may be to come. My opinion on the coming volatility is for a relatively simple reason.
Disney is a company that focuses on entertainment. Between movies, television shows, theme parks, and more, DIS is a company that does very well under positive economic conditions. Although economic conditions are relatively positive in the United States, that’s not necessarily the case around the world. The reality is some of the world’s largest economies, including Europe, China, Canada, and Japan, are struggling in a big way. Unfortunately for Disney, this is where quite a few of their theme park visitors come from. Moreover, these countries are all places where DIS makes massive amounts of money from movie sales and more. With economic conditions doing poorly, Disney is likely to realize a lower volume of sales.
While Disney is not having the best of times in the market, it’s important to remember that DIS currently has a record breaking movie in theaters at the moment. That movie is “Star Wars: The Force Awakens”. In its third weekend in theaters, the movie raked in $88.3 million, which brings the total domestic income for DIS from this movie to $740.3 million. At this rate, Disney’s “Star Wars: The Force Awakens” will likely beat Avatar’s record for the highest grossing movie of all time on a domestic scale. If the movie performs as well in China, it will likely break even global box office records. However, while this will likely give Disney a boost in the market, I don’t think it will lead to long term growth. For that, we are going to need to see positive economic activity around the world.
What We Can Expect From DIS Moving Forward
Moving forward, I have a mixed opinion with regard to what we can expect to see from DIS. In the short term, things aren’t looking very good. Although “Star Wars: The Force Awakens” is raking in a massive amount of money, I still don’t believe that the amount of money made on the movie is enough to offset the lack of sales caused by slowing economic conditions around the world. However, in the long run, my opinion becomes far more bullish. Disney has made it through economic struggles many times in the past. While poor economic conditions may cause volatility over the next few months and maybe even longer, over the next year or more we can expect to see gains. Ultimately, economic issues aren’t going to last forever, and when they are over, DIS will climb!
What Do You Think?
Where do you think DIS is headed moving forward? Let us know your opinion in the comments below!
[Image Courtesy of Wikipedia]