Why everyone is talking about Disney Stock
Businesses in many different industries have been severely affected by the pandemic. But one company has several of these companies under one umbrella. Walt disney (NYSE: DIS) relied on theme park vacations, cruises, sports, and film industry vacations for almost everything she did before the pandemic, and each of them practically came to a halt when it struck.
Disney’s management quickly pivoted and created a TV streaming segment that flourished while its other activities were on hold. Now that the vaccinations are rolling out, things are opening up and people are talking about more than just streaming services.
A lot to say
Disney took another big step forward on its way back to normal with the reopening of its Disneyland and California Adventure parks in Anaheim on April 30. ceremony. The company was working with Anaheim city officials during the pandemic restriction period on a long-term plan to develop the station and to help propel the city’s economic recovery from the pandemic. The fact that planning was always the focus during the crisis is something shareholders can feel good about.
The slow return to normal business is of direct benefit to all segments of Disney. Theaters are once again welcoming customers and movie releases are back on schedule. Sporting events are making a comeback, adding value to the company’s media assets. But one area that has been in growth mode throughout the pandemic is one of the main areas of investor interest in what the future holds for Disney.
A streaming giant
Disney reported more than 146 million paid subscribers for its Disney +, ESPN +, and Hulu streaming services as of January 2, 2021. It has since announced that Disney + alone exceeded 100 million subscribers. The popularity has already given the company the confidence to raise prices for the service for the first time, and it now believes it will be on track to run Disney + with a profit in fiscal 2024.
The media segment recently signed a new long-term deal with the National Football League, further boosting the appeal of its ESPN and ABC networks, as well as the ESPN + streaming service. The company also extended Disney + to international markets in February with its Star service brand.
Anticipation of streaming success helped the stock’s performance last year. Even though much of the overall activity was essentially at a standstill, Disney shares have gained nearly 30% since the start of 2020.
Back to business
Yields have been virtually flat so far in 2021, with investors appearing to be waiting for more data from the next stage of the recovery. Total revenues compared to the periods of the previous year have fallen by 23% and 22%, respectively, in the last two quarters.
Investors will be looking for signs of progress in revenue recovery when Disney releases its financial results on May 13. Even simply reverting to pre-pandemic sales levels would bring today’s valuation down to less than 4.5 price-to-sales.
And while it may still be too early to reestablish suspended dividend management to save money while navigating the crisis, investors have that to look forward to on the horizon as well. For now, the company’s details of the progress being made towards returning the business to pre-pandemic levels should be enough to get investors to talk about Disney.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.