Disney Stock Plunges 11% To New Multi-Year Low On Earnings Miss, Weak Profit Outlook
09.11.2022 - 18:55
/ deadline.com
Disney stock has fallen more than 11% today on double its normal trading volume, as investors recalibrate their expectations in light of a shaky quarterly earnings report.
At $88.53, Disney shares were at their lowest point since 2014, with bears seizing on the company’s much-lower-than-expected profit forecast as well as a significant undershooting of Wall Street expectations for the fiscal fourth quarter. Disney’s streaming business has proven a bright spot (Disney+ added 12.1 million subscribers to hit 164.2 million globally) but profitability is weighing on investors’ minds. Traditional businesses like linear TV are under significant pressure from cord-cutting.
In a flurry of research notes, analysts debated the puts and takes from the earnings report, with several of them slashing their stock price targets for the company.
Michael Nathanson of MoffettNathanson called the company’s forecast for fiscal 2023 segment earnings growth of high-single-digits compared with Wall Street’s consensus of 25% and his own outlook for 34% “the biggest controversy” in Disney’s earnings report. “Rarely have we ever been so incorrect in our forecasting of Disney profits,” the analyst wrote. “Given the company’s confidence that Parks trends appear resilient, it appears that the culprit for the massive earnings downgrade is much higher than expected DTC losses and significant declines at Linear Networks.” Nathanson, who maintains a “market perform” (neutral) rating on Disney shares, lowered his 12-month price target by $30, to $100.
The winner for cheekiest headline of a report goes to Michael Morris of Guggenheim, who nodded to Obi-Wan Kenobi’s Jedi mind trick in titling his Disney assessment, “These Are Not The Results You’re Looking
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