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Disney Stock Forecast: Is This Beloved Institution a Buy?

When putting together a Disney stock forecast, it’s important to look not just to past performance, but also future projects that could serve as catalysts.
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When it comes to putting together a Disney stock forecast, there is a lot to consider. First and foremost, it’s worth noting that in the United States, there are few companies that are as beloved as the Walt Disney Company. Most kids grow up watching Disney movies… Playing with toys of the characters… And dreaming of a trip to one of its theme parks. This is just part of the reason that Mickey Mouse has built up worldwide brand awareness of 97%. This makes Disney’s chief mascot more recognizable than Santa Clause.

Additionally, what started with just a mouse has grown into one of the largest entertainment conglomerates in the world. Today, Disney boasts a list of assets that has just about everything consumers love:

  1. Disney Animation
  2. Pixar
  3. Marvel
  4. Star Wars
  5. Hulu
  6. ESPN
  7. 21st Century Fox

As far as investing goes, Disney is one of those rare stocks where it’s almost never a bad idea to buy some. Disney has seemingly unlimited demand for its movies and parks. It’s essentially a money-printing machine… Or at least it was until the coronavirus pandemic hit.

COVID-19 forced Disney to shut down its parks completely for just about an entire year. That made a Disney stock forecast slightly more difficult in the past. Nonetheless, the significance of this can’t be overstated. Disneyland has closed down just twice in its 66-year history. The first time was in 1963 when President John F. Kennedy was assassinated. The second was in 2001 due to the 9/11 terror attacks.

So, will the pandemic have a long-term negative impact on Disney’s stock price? Or is it a short-term issue that has created a great time to buy more stock and average down?

Let’s take a look at a Disney stock forecast and find out!

Disney Stock Forecast (NYSE: DIS)

When making a Disney stock forecast, it’s important to look at its leadership team. Notably, Disney recently welcomed a new CEO. Bob Chapek took the helm in February 2020 after former CEO Bob Iger stepped down. If you’ve ever felt stressed at your job, just imagine taking over as Disney’s CEO just one month before a once-in-a-lifetime pandemic strikes.

Prior to stepping down, Iger had an incredibly successful run as Disney’s CEO. In total, he was there for 14 years. During his tenure, Disney’s stock price increased by about 12% annually. He was also responsible for buying Star Wars, Marvel, and Pixar as well as launching Disney+. On one hand, investors can rest easy because Chapek is taking over a well-oiled machine. On the other hand, Iger’s leadership will definitely be missed.

With a massive company like Disney, it’s important to understand all of the different ways that it makes money.

Disney’s business segments:

  • Media Networks
  • Parks, Experiences, and Products
  • Studio Entertainment
  • Direct-To-Consumer (DTC)
  • International

In 2019, these business lines brought in $69 billion in total revenue and net income of $11.5 billion. This translated to annual earnings per share of $6.64. 2020 was obviously a much different story as several key pieces of Disney’s business were closed for months on end. However, Disney has bounced back strongly in 2021 and reported Q3 2021 revenue of $17 billion. Its bottom line has also been back in the green recently. Disney posted a net income of $901 million in Q2 2021 and $918 million in Q3 2021.

Disney’s saving grace during the pandemic was mainly its new streaming service: Disney+. While parks were closed and movie production was halted, Disney+ was able to continue as usual.

On July 3rd, 2021 Disney announced the following membership numbers:

  • Disney+ – 116 million
  • ESPN+ – 14.9 million
  • Hulu – 42.8 million
  • Total membership base – 173.7 million

Ready For The Competition

For reference, the top streaming dog, Netflix (Nasdaq: NFLX) currently has about 209 million subscribers. What makes Disney such a formidable foe in the streaming industry is the size of its content base.

Disney has decades of content to pull from to offer its viewers. Additionally, it has plenty of wells to draw from in terms of finding new content. Pixar should continue to churn out popular movies. Old characters could be revamped in new spinoff shows. Plus, fictional worlds like Star Wars or the Avengers can continue to be expanded on. And all of this will take place exclusively on Disney+.

Additionally, the fact that Disney also owns ESPN and Hulu means that Disney can bundle its services together. This means a higher overall value for customers, which creates another advantage over competitors.

Disney+ is still just about 2 years old. But it will be interesting to continue watching how Disney leverages this new service.

Disney Stock Price Forecast

Disney stock price has been a little more volatile than normal over the past year or so. In early 2020, it dropped by over 40% during the height of the pandemic crash. However, it rallied through the rest of 2020 and ended the year +20%. So far in 2021, Disney stock has mainly moved sideways.

It’s interesting that Disney’s stock has moved sideways while the overall market is up about 18%. That being said, Disney’s stock is up by about 90% over the past 5 years.

Disney Earnings Report

Disney’s next earnings report is scheduled for Nov. 10th, 2020.

Despite the turbulence from the COVID-19 pandemic, Disney’s recent earnings reports have been strong. Disney has beaten its past 4 earnings per share (EPS) expectations and 3 out of 4 of its revenue expectations. For the most part, it hasn’t even been close. For example, Disney has beaten its last 4 EPS expectations by 69%, 194%, 202%, and 45% respectively.

Disney has missed just one revenue expectation by 2% in Q2 of 2021. Interestingly, these strong reports have not really resulted in a rising stock price. So far in 2021, Disney’s stock is actually down 2%. This has made it somewhat difficult to compute a Disney stock forecast.

Is Disney Stock A Buy?

To answer this question (for any company) it’s always a good idea to look at what lies in the future. In Disney’s case, there are three newsworthy events coming up to consider.

First, Disney has already secured the year’s two highest-grossing films (Black Widow and Shang-Chi and the Legend of the Ten Rings). However, another star-studded film is set to release on October 15. The Last Duel will feature Matt Damon, Ben Affleck, and Jodie Comer. It’s also being directed by ​​Ridley Scott.

Second, on October 19 Disney will introduce Disney Genie to its Florida park. This new planning tool will let guests reserve spots in line, create itineraries, and purchase paid access to fast lanes. If this rollout is successful, it could be a great value-add to visiting a Disney theme park. Since Disney parks were closed for almost all of 2020, there is likely to be a resurgence in park attendance as families try to reschedule previous trips and make up for lost time.

Lastly, Disney World has announced a new resort set to debut in March 2022. This premium resort is called Star Wars: Galactic Starcruiser. It will offer guests a two-night fully immersive cruise through “outer space.”

The Bottom Line on Disney Stock

In summary, The Walt Disney Company has had one of the toughest stretches in its history. However, it has successfully navigated the worst of the pandemic and it seems as though clearer skies are ahead. As far as its earnings expectations, Disney has largely outperformed analysts’ expectations. Despite this, Disney stock has moved sideways for most of 2021. But for how long that continues is uncertain.

I hope that you’ve found this Disney stock forecast valuable when it comes to learning whether or not you should buy Disney stock! As usual, all investment decisions should be based on your own due diligence and risk tolerance.

And if you’re looking for additional information on the best stocks to buy and hold, we recommend signing up for the Liberty Through Wealth e-letter. In it, Alexander Green helps investors find investment opportunities with the most momentum before institutional investors get in on the action. All you have to do is enter your email address in the box below to get started.

NOTE: I’m not a financial advisor and am just offering my own research and commentary. Please do your own due diligence before making any investment decisions. I also have a small position in Disney.

The post Disney Stock Forecast: Is This Beloved Institution a Buy? appeared first on Investment U.

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Government

Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

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Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

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International

Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

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Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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Government

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While “Waiting” For Deporation, Asylum

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several…

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The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

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