Reasons why Walt Disney stock fell 14 percents in November

2021-12-06T17:38:29
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Reasons why Walt Disney stock fell 14 percents in November

Reasons why Walt Disney stock fell 14 percents: in November: Disney reported lower-than-expected earnings last month, due to lower profits from its theme parks.

Topics:
What happened to Walt Disney
What is the meaning
Expert expectation to Walt Disney stock performance
Drop in Disney+ subscribers
What will happen now

 

 

What happened to Walt Disney

Walt Disney’ shares dropped 14.3% last month, according to information provided by S&P world Market Intelligence,
following its commercial enterprise fourth-quarter financial statement.

While Disney+ subscriber growth slowed during the quarter,
the real reason for the stock’s performance was lower-than-expected results in theme parks

What is the meaning

Overall, Walt Disney’s theme parks are in better shape than a year ago, but fourth-quarter earnings of $640 million ,

from theme parks and products fell short of analyst expectations of $890 million.

Theme park performance contributed nearly half Disney’ earnings throughout the quarter, thus it’ a crucial part of the Disney empire.

Expert expectation to Walt Disney stock performance

For the first time since the eruption of the Coronavirus, the theme parks within the last quarter were open to guests,
that is why investors were hoping for higher results from the theme parks sector.

But there are long-term initiatives to increase the amusement park’s profit margins.
like the new Disney Experience app’s guaranteed Genie service that helps guests save time waiting for their turn and even ordering food.

 

 

Drop in Disney+ subscribers 

As for the streaming service, management previously warned analysts that Disney + subscribers would decline in the quarter, and that is exactly what happened.

Disney+ added 2.1 million paying subscribers during the quarter, bringing the total to 118.1 million. T

his is the slowest rate of increase compared to the previous quarter when Disney saw subscriber numbers more than double over the year.

Management attributed the shortage to production delays due to the pandemic, but this is a short-term problem.

 

What will happen now

The top Walt Disney entertainment company stock is seen as more attractive to buy,
after a post-earnings dip as investors can now buy a share of the Magic Kingdom at a lower valuation.

The stock is down about 20% year-to-date and is trading at 21 times the strength of Disney’s $7.08 earnings on an adjusted basis in fiscal 2018,
which was before massive investments in the 2019 calendar to prepare for the launch of Disney+.
Despite its quarterly results, Disney is still in a position to grow in the streaming business over the next few years.

It has 61 new films and 17 spin-offs in production. As happened with Netflix in the last decade, if you create content, the number of subscribers increases in large numbers.

 

 

 

 

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