Walt Disney Stock is Dangling a Carrot

Media and entertainment giant The Walt Disney Company NYSE: DIS stock has been collapsing with the benchmark indexes in 2022. While the Company missed analyst estimates for its fiscal Q4 2021, shares have dropped an additional (-30%) since the report. The Company is continuing to expand its reach for its Disney+ and ESPN+ streaming services and growing content. Disney also has the ultimate network effect as its businesses overlap consumer touchpoints including theme parks featuring the rich line-up of Disney movie characters and streaming memberships to the Disney Cruise Line. Prudent investors that have been seeking opportunistic pullbacks in shares of this iconic brand, can watch for opportunistic pullbacks.

Q4 FY 2021 Earnings Release

On Nov. 10, 2021, Disney released its fourth-quarter fiscal 2021 results for the quarter ending September 2021. The Company reported an adjusted earnings-per-share (EPS) profit of $0.37 excluding non-recurring items versus consensus analyst estimates for $0.51, a (-$0.14) miss. Revenues rose 26% year-over-year (YoY) to $18.53 billion, falling short of consensus analyst estimates for $18.77 billion. Domestic revenue channels fell (-5%) and operating income fell by (-14%). Disney+ subscriptions grew 60% YoY to $118.1 million and ESPN+ subs rose 66% YoY to 17.1 million.

Conference Call Takeaways

Disney CEO Bob Chapek discussed the growth in Disney+ access and ESPN+ sports content, “The service is now available throughout Japan, and we're thrilled to be launching it this Friday on Disney+ Day in South Korea, in Taiwan, and in Hong Kong on November 16. In just 2 short years, we're now in over 60 countries and more than 20 languages, and next year, we plan to bring Disney+ to consumers in 50 plus additional countries, including in Central, Eastern Europe, The Middle East, and South Africa. Our goal is to more than double the number of countries we are currently in to over 160 by fiscal year '23. Turning to Sports, we continue to build out ESPN+ with exclusive sports content that makes our DTC offering the perfect complement to the ESPN linear experience, and with every new sports rights deal, we have considered both linear and DTC. In fact, all 7 of the major deals we made in the last year-and-a-half included a streaming component. Among them is our historic 10-year NFL rights agreement, which begins in 2023. We also recently signed a 5-year deal with the league for Monday night Wild Card game, which runs through 2025. Another example is our 7-year rights deal with the NHL, 75 of the League's live national games are and will be available exclusively on ESPN+ and Hulu, and ESPN+ is the sole home for more than 1,000 out-of-market NHL games. By the way, this is another reason that Disney Bundle is proving highly appealing to consumers. Because live sports are key element, and a key differentiator of our Disney ecosystem. Some 90% of the most-watched telecast last year were sports, and they continue to perform extremely well. For example, the NHL's opening night games on ESPN last month marked the highest viewed season-opening doubleheader on record, with an increase of 54% over the 2019/2020 season-opening day letter, and we are particularly pleased with the NHL's Direct-to-Consumer performance on ESPN+ and Hulu. Likewise, the hugely popular UFC, fresh off a strong card at Madison Square Garden last weekend, continues to be a top performer for ESPN+ with 6 of the top UFC on ESPN+ pay-per-views coming in the past year. At the same time, we continue to expand our original sports programming with innovative broadcast like the hugely popular Monday Night Football with Peyton and Eli, which airs on ESPN2, and reached 1.9 million viewers by its second week, as well as the highly anticipated new shows like Man in the Arena: Tom Brady, the multi-part docuseries about the legendary quarterback premiering on ESPN+ on November 16, along with a host of fantastic new social and digital shows and podcast. We're also moving towards a greater presence in online sports betting, and given our reaching scale, we have the potential to partner with third-parties in this space in a very meaningful way. Suffice to say, we continue to see enormous opportunity in sports, and all of this, the right steels, our innovative programming, and the flexibility achieved through our DTC business, which saw ESPN+ subscribers, increased by 66% over the past fiscal year alone. All of this is a testament to the clear ambition we have in sports.”

DIS Opportunistic Pullback Price Levels

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for DIS stock. The weekly rifle chart collapsed after peaking near the $161.38 Fibonacci (fib) level. The weekly rifle chart formed an inverse pup breakdown with a falling 5-period moving average (MA) at $148.13 followed by the 15-period MA at $154.52. The weekly stochastic formed an inverse pup breakdown with weekly 200-period MA at $137.66 and low Bollinger Bands (BBs) at $124.82. The weekly market structure low (MSL) buy triggers on the breakout above $154.66. The daily rifle chart downtrend stalled at the 5-period MA at $136.32 followed by the falling 15-period MA at $147.10. The daily stochastic crossed back up through the 20-band. The daily 200-period MA sits at $170.15 and lower BBs at $126.26. Prudent investors can monitor for opportunistic pullback price levels at the $137.77 fib, $131.51 fib, $130.37 fib, $125.72 fib, $117.51 fib, $115.35 fib, $111.21 fib, $107.59 fib, and the $101.49 fib level. Upside trajectories range from the $167.23 fib level up towards the $193.45 fib level.