Disney Stock Indicators Point to Bearish Trend, Analyst Consensus Remains Bullish
StockInvest.us, 2 months ago
Technical Analysis of The Walt Disney Company (DIS)
As of September 28, 2023, the closing price of DIS was $80.13, reflecting an increment of $0.23 (0.29%) from the previous trading day. Pertaining to the daily trading range, DIS had a low price of $79.66 and a high of $80.92. The volume of shares traded during this day was 9.52 million, which is lower than the average volume of about 16.17 million. This could suggest less trader interest in the day's session.
In terms of price momentum indicators, the Relative Strength Index (RSI) is at 44, indicating a neutral momentum. Turning to moving averages, the 50-day moving average stands at $84.73, while the 200-day moving average is $93.33. With the current price below both averages, this suggests a potential bearish trend.
The Moving Average Convergence Divergence (MACD) for the last three months, a key indicator for trend reversals and pricing cycles, is -0.70. This negative indicator reinforces the potential bearish momentum. The Average True Range (ATR), which measures market volatility, is 2.02.
For the technical support and resistance levels, the support is at $80.05, and the resistance at $81.64. These levels are very close to the current price which may indicate high price fluctuation in the near term.
Fundamental Analysis of The Walt Disney Company (DIS)
As of the last close, The Walt Disney Company's market capitalization was approximately $148.30 billion. The firm's earnings per share (EPS) is $1.21, indicating a price-to-earnings ratio (PE) of 66.98, which might reflect an overvaluation of the stock if compared to the average PE in the industry.
Looking at company news, Disney announced its initiative to curb password sharing in Canada for its Disney+ streaming service. This may potentially increase subscription revenues in the streaming sector.
The consensus for Disney among 21 analysts is to Buy, with the majority of 17 recommending a Buy, 3 recommending a Hold and only 1 advising a Sell. This may reflect a broad confidence in Disney's future performance among the experts.
The target price range for Disney's stock set by these analysts ranges from a whopping $263 to a low of $94, with a consensus average of $156.89 and a median of $151.
Under the Discounted Cash Flow (DCF) valuation method, the estimated intrinsic value of Disney's stock is $87.41, which is marginally above its current trading price.
Stock Performance Predictions
Based on the technical data, Disney's stock seems to be in a possible bearish trend, as indicated by the trading price being below the 50-day and 200-day moving averages. However, noted recent news and the overall analyst consensus predicting an upward trend.
For the next trading day, September 29, 2023, the price could fluctuate between the immediate support of $80.05 and resistance of $81.64. For the upcoming week, if the prevailing bearish trend continues, prices may dip closer to the technical support level.
Final Evaluation
The presented data suggests a mixed picture. On one side, the technical indicators lean towards a bearish outlook. However, the DCF estimate and analyst consensus lean more bullish, indicating possible growth potential. The recent news about cracking down on password sharing for Disney+ should also potentially contribute positively to future revenue.
Given this mixed but overall forward-looking sentiment, the recommendation would be to Hold on to The Walt Disney Company (DIS) stock. Existing investors may want to observe further before making further investment moves. Potential investors may also want to consider the possible upside potential indicated by the analysts' consensus and DCF model.
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