Why the DIS Weekly
Options Trade was Executed?…..
Walt Disney Co (NYSE:DIS)’s stock was
downgraded this week by investment advisory company KeyBanc Capital Markets
over fears of stalled growth at its Disney+ and Hulu streaming services and
lower attendance at its theme parks, according to reports.
Disney appears less expensive versus its historical average, we believe the
stock is unlikely to work until a number of items have line of sight to being
resolved," analysts led by Brandon Nispel said on Wednesday.
analysts lowered Disney’s rating from overweight to sector weight Wednesday,
causing its stock price to fall.
analysts' main concerns included the slow growth of subscribers to Disney+ and
Hulu, a possibly too-high price for the new ESPN streaming service, weak theme
park attendance compared to company expectations, the company being too ambitious
about content distribution profits and shares dropping last year with a similar
financial setup this year, the outlet reported.
Since its peak of
nearly $200 in late 2021, Disney’s stock has fallen sharply.
The DIS Weekly
Options Trade Explained.....
** OPTION TRADE: Buy DIS JUL
28 2023 90.000 PUTS - price at last close was $1.68 - adjust accordingly.
Entered the DIS Weekly Options contract on Wednesday, July 05,
2023, for $1.85.
SOLD HALF the DIS weekly options contracts on Thursday, July 06,
2023, for $3.25; a potential profit of 76%.
Holding the remaining DIS weekly options contracts for
further profit before expiry.
Don’t miss out on further trades – become a
About Walt Disney.....
Disney Company, together with its subsidiaries, operates as an entertainment
company worldwide. It operates through two segments, Disney Media and
Entertainment Distribution; and Disney Parks, Experiences and Products.
engages in the film and episodic television content production and distribution
activities, as well as operates television broadcast networks under the ABC,
Disney, ESPN, Freeform, FX, Fox, National Geographic, and Star brands; and
studios that produces motion pictures under the Walt Disney Pictures, Twentieth
Century Studios, Marvel, Lucasfilm, Pixar, and Searchlight Pictures banners.
offers direct-to-consumer streaming services through Disney+, Disney+ Hotstar,
ESPN+, Hulu, and Star+; sale/licensing of film and television content to
third-party television and subscription video-on-demand services; theatrical,
home entertainment, and music distribution services; staging and licensing of
live entertainment events; and post-production services by Industrial Light
& Magic and Skywalker Sound.
the company operates theme parks and resorts, such as Walt Disney World Resort
in Florida; Disneyland Resort in California; Disneyland Paris; Hong Kong
Disneyland Resort; and Shanghai Disney Resort; Disney Cruise Line, Disney
Vacation Club, National Geographic Expeditions, and Adventures by Disney as
well as Aulani, a Disney resort and spa in Hawaii; licenses its intellectual
property to a third party for the operations of the Tokyo Disney Resort; and
provides consumer products, which include licensing of trade names, characters,
visual, literary, and other IP for use on merchandise, published materials, and
sells branded merchandise through retail, online, and wholesale businesses; and
develops and publishes books, comic books, and magazines.
Disney Company was founded in 1923 and is based in Burbank, California.
Further Catalysts for the DIS Weekly Options Trade…..
noted that Disney would likely have to raise prices for current Disney+ and
Hulu customers and devise strategies to retain those same customers such as a
tiered system for those wanting to pay less.
releases like "The Little Mermaid" also face smaller audiences at
theaters, the analysts said.
also noted that while demand for sports on cable TV remains high, customers
aren’t showing the same willingness to pay for an ESPN streaming service just
park attendance at Disneyland during its 100th Anniversary celebration this
year was also seen as a "contraction" compared to the attendance at
Disney World’s 50th Anniversary celebration from 2021 to earlier this year, and
KeyBanc said those realities weren’t included in the company's expectations for
predicted a "deceleration of revenue" between the third and fourth
quarter despite Disney’s bullish expectations.
Nispel downgraded the mass media company to “sector weight”. He doesn’t have a
price objective on it, though.
turned dovish on Disney stock primarily because he sees expectations of its
theme parks as too high particularly considering the tougher comps ahead.
We prefer to
step aside, acknowledging meaningful uncertainty, and wait for further
catalysts, as buying the dip has been a losing trade.
noted that the data for its domestic theme parks was weak for the past two
analyst also warned of a potential decline in the total number of subscribers
at Disney+ and Hulu in its current financial quarter.
downgraded the Disney stock today also because the demand for ESPN or sports in
general appears to be not as resilient on streaming as it is on linear TV, as
per the KeyBanc research.
company] has started to drive pricing, we have yet to see Disney services
separate from peers from a churn standpoint, though it arguably has had a
the need for Disney to better monetise the subscribers it already has via price
hikes. The Burbank-headquartered multinational is expected to report its
third-quarter financial results in early August.
to the issued ratings of 19 analysts in the last year, the consensus rating for
Walt Disney stock is Moderate Buy based on the current 3 hold ratings and 16
buy ratings for DIS. The average twelve-month price prediction for Walt Disney
is $121.82 with a high price target of $177.00 and a low price target of
Shares of DIS opened at $90.50 on
Wednesday. The business's 50 day moving average is $92.79 and its two-hundred
day moving average is $96.78. Walt Disney has a 52-week low of $84.07 and a
52-week high of $126.48. The firm has a market cap of $165.37 billion, a
price-to-earnings ratio of 40.22, and a PEG ratio of 1.99 and a beta of 1.28.
The company has a quick ratio of 0.94, a current ratio of 1.01 and a
debt-to-equity ratio of 0.44.