Disney Stock: Disney Stock Technical Analysis

Disney Stock (DIS) is the IBD Stock Of The Day as the media and entertainment giant looks to return to growth with the economy reopening. Disney stock is in the buy range and could present a new entry soon. The company’s California theme parks are set to reopen in late April.

Disney Stock

They were shut down for more than a year due to the coronavirus pandemic. In fact, Disney could be seen as a vaccine-leveraged stock, with businesses from parks to movies and cruises poised to benefit as more coronavirus restrictions ease.

Disney Stock

Wall Street expects revenue will grow 6% in fiscal 2021, which ends in September, then jump 24% in 2022, far above the average 8% growth seen over the past three years. EPS is seen down 1.5% in fiscal 2021 then soaring 136% to $4.70 in 2022.

During the lockdown of its parks, Disney didn’t sit still. It revealed plans last week to upgrade its California parks with new rides, shops, and restaurants. Meanwhile, Disney+ continues to add subscribers at a robust clip, helped by buzz-worthy content and rising fees. Shows such as “WandaVision” and “The Mandalorian” were massive streaming hits, while feature films like “Raya and the Last Dragon” and Pixar’s “Soul” premiered on Disney+. Now, it’s taking the highly anticipated Marvel title “Black Widow” to theaters and the Disney+ streaming platform simultaneously.

By 2024, Disney forecasts 230 million to 260 million Disney+ subscribers, up from an estimate of 60 million-90 million when the service launched in the U.S. just over a year ago. Disney could even take Netflix’s (NFLX) crown as the world’s biggest streaming firm in 2024, with Apple (AAPL) and Amazon (AMZN) also hot on Netflix’s heels.

Disney Stock Technical Analysis

Shares recently rose 0.4% to close at 185.53 on the stock market as they tried to find support at the 10-week line. Disney stock is back above a 183.50 flat-base buy point first cleared 8th of February, 2021.

The flat base stretches back to January and follows a huge rally for Disney stock from March 2020 coronavirus lows. If shares get back above their 21-day line, they would likely snap a downtrend and offer an early entry for a short consolidation that could be a flat base after next week with a 203.12 entry.

The relative strength line for Disney stock is lackluster. It rose for most parts of 2020 but has moved sideways in the longer term. A rising RS line means that a stock is currently outperforming the S&P 500 index. It is the blue line in the chart shown.

Disney holds a solid Relative Strength Rating of 70 out of a best-possible 99, according to IBD Stock Checkup. That means it has outperformed 70% of all stocks in the past year. However, its IBD Composite Rating, which combines key fundamental and technical metrics in a single easy-to-use score, is a weak 29.

It earns a dismal EPS Rating of 13 out of 99 and an SMR rating of D, on a scale of A+ to a worst E. Disney stock shows two-quarters of increasing fund ownership and that’s a sign that bullish hopes for Disney’s transformation are attracting the big money. More research can be done on Google.

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