Disney Stock Continues to Drop Amidst Q2 Earnings Report Concerns

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Are Disney shareholders in for a rude awakening? The Walt Disney Company (DIS) will report its Q2 earnings tomorrow, and investors are already nervous that Disney+ will see a drop off in subscribers akin to Netflix’s catastrophic losses.

Shares of Disney have been steadily dropping for weeks, with the company reaching a 52-week low of $106.68 as the time of of writing. That’s a far cry from the 52-week high of $187.58 per share, and a loss of over 42% in one year.

This despite pandemic restrictions being all but completely lifted in most parts of the country, and despite Doctor Strange in the Multiverse of Madness dominating the box office this weekend.

From Yahoo! Finance

New sign-ups are projected to pick up to nearly 10.8 million from April to June, analysts estimate.

Disney reiterated in February that it expects to amass between 230 million and 260 million Disney+ subscribers by the end of September 2024.

The company needs to average nearly 9.1 million new customers per quarter to reach the low end of that range, or 11.8 million to reach the high end. Chief Executive Bob Chapek has said that growth may fluctuate from quarter to quarter.

Analysists also cite backlash over Disney’s recent political standoff in Florida — and the impending loss of Reedy Creek — as a factor that may cause some customers to boycott Disney in protest.

Wells Fargo analyst Steven Cahall claims that he expects Disney+ to be light on new subs this quarter. He expects only 3.5 million new signups, compared to others believing that Disney will land over 5 million.

“The March quarter is expected to be light on Disney+ net adds due to limited new content + market launches,” he said.

Still, it’s not all doom and gloom for the House of Mouse. Some experts are adjusting Disney’s earnings estimate, indicating that they think Mickey might actually beat expectations this quarter.

It’s not just Disney stock that is down. The entire stock market is taking a tumble, and many are claiming a recession is right around the corner — if not already here. That means that many families will tighten their belts, and discretionary spending on “luxury items” like Disney vacations may be postponed until the storm blows over.

Disney’s Q2 FY22 Earnings Results Webcast will be livestreamed on May 11, 2022 at 4:30 p.m. EST.

[Source: Yahoo! Finance]



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