Is Disney Stock a Buy?

Is Disney Stock a Buy?
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In this article I’ll give you my personal opinion on if Disney as a stock is a buy or not. Disney is currently at $104 per share. I also talk more about Disney in my blog ‘Top 5 Stocks to Buy and Hold’.

Courtesy Seeking Alpha

The Bad

Disney recently reported not so good quarterly earnings. Revenue was up 28% at $18.1 billion. But that was only because the revenue from the Fox acquisition kicked in. Parks and cruises have been closed. Operating income took a $1 billion hit. Next quarter’s earnings are likely to be ugly also. The tough part with Disney( and almost all companies) is they can’t even forecast or give any guidance because they don’t know when parks and cruises will open back up in the US. When will theaters open back up? Nobody knows for sure.

The Good

Disney suspended it’s semi-annual dividend. You might not think that’s good news. But that saves them about $1.6 billion. That, along with most of the executives foregoing all or most of their salaries will help them stay afloat during these tough times. Disney has been aggressively investing in Disney+. They’re not even close to turning a profit. But this is a good chance to wow people. They are currently at 54 million subscribers. Already a quarter of where Netflix is at in terms of subs. The challenge will be retaining these customers. A lot of their subs come from packaged deals with phone services. Or because of quarantine. The true test will be when quarantine is lifted and the Verizon 1 year contracts are up with the Disney+ deals. 

Conclusion

Disney is focusing so hard on Disney+. They’re currently on a 3-4 year plan to turn a profit. Their parks will open up and things will eventually be back to normal. This is definitely a big setback and if you plan on buying, you will most likely need to think long. Disney is a good long term investment. I already have a solid position in Disney at a cost basis of $82 per share. Will I be buying more? Possibly. I think Disney stock anywhere under $100 per share is a good deal. 

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