By Peet Serfontein & Khumbulani Kunene
The Walt Disney Company, commonly known as Disney, is a well-diversified global entertainment and mass media conglomerate headquartered in California, USA.
The company operates as a media network business, owning several business networks such as ABC, ESPN, and Disney Chanel, with steaming services through Disney+. Additionally, the company has expanded to theme parks and resorts services and also offers studio entertainment for film and television production.
Technically, we like the stock from a seasonal perspective. Disney usually produces positive returns between October and May (see the notation on the main chart). This is potentially due to seasonal factors or favourable market conditions during this period.
The stock is trading below its 200-day simple moving average (SMA) of $100.70, but above its 200-month SMA. This signals that despite short-term weakness, the overall momentum over a longer horizon is positive. Short-term dips below the 200-day SMA can present buying opportunities for investors looking to capitalise on an eventual recovery and continued alignment with the long-term trend.
The start of the upside price momentum according to the MACD indicator, as well as the recent upward momentum of the On-balance volume (OBV) indicator, supports our bullish stance.
Share Information
| Share Code | DIS |
|---|---|
| Industry | Media & Entertainment |
| Market Capital (USD) | 170.6 billion |
| One Year Total Return | 16.06% |
| Return Year-to-Date | 4.65% |
| Current Price (USD) | 94.05 |
| 52 Week High (USD) | 123.74 |
| 52 Week Low (USD) | 78.73 |
| Financial Year End | September |
| The stock price has lost momentum over the past few months(as expected) but is beginning to recover. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 3.76 | 4.95 | 5.14 | 5.79 |
| Growth (%) | 31.62 | 3.92 | 12.58 | |
| Dividend Per Share (USD) | 0.00 | 0.76 | 1.04 | 1.20 |
| Growth (%) | - | 36.76 | 15.80 | |
| Forward PE (times) | 18.27 | 16.23 | 16.24 | |
| Forward Dividend Yield (%) | 0.81 | 1.10 | 1.28 | |
| Earnings over the near term are expected to improve substantially. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view:
| Share Name and position | BALL US - Take profit (Close the position) |
HSY US - Sell (Close the position) |
ETN US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 61.71 | 192.67 | 297.69 |
| Current | 67.61 | 191.81 | 327.58 |
| Movement | +9.6% | -0.4% | +10.0% |
| We suggest taking profit to reduce overall portfolio exposure. | We exited this trade due to deteriorating technicals. |
A price action that gave a "buy" signal based on a Bollinger Band strategy remains of interest. Remains above its 200-day SMA and emerging upside price momentum supports the trade.
Our profit target remains at $352, with a trailing stop-loss at $306. Exit the trade by 13 December 2024. |
| Share Name and position | FAST US - Buy (Continue to hold) |
RJF US - Buy (Continue to hold) |
SYY US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 66.90 | 117.58 | 75.19 |
| Current | 71.09 | 123.00 | 77.74 |
| Movement | +6.3% | +4.6% | +3.4% |
|
A developing rising wedge pattern remains of interest. Remains above its 200-day SMA. Upside price momentum supports the strategy.
Our profit target is $75, with a trailing stop-loss of $67.70. Exit trade by 23 October 2024. |
A broadening top pattern remains attractive. The stock remains above its 200-day SMA, and emerging upside price momentum is supportive.
Our profit target is $132, with a trailing stop-loss at $116.80. Exit the trade by 6 December 2024. |
A developing symmetrical triangle pattern remains of interest. Remains above its 200-day SMA. Fading upside momentum is a concern.
Our profit target is $84 with a trailing stop-loss at $74.40. Exit the trade by 6 November 2024. |
