Walt Disney Co (NYSE: DIS ) is under serious pressure in mid-day trading on Thursday, pushing shares back below the 200-day moving average amid what looks like a technical breakdown in progress. This is disappointing for Disney stock owners who enjoyed a near 30% rebound from its October low to retest its 2015 highs near $115.
But the reappearance of fears around its media business - specifically ESPN and other cable networks - has brought the sellers back out and pushed shares down more than 10% from their high.
A return to last year's lows in Disney stock would result in a loss of nearly 13% from current levels.
Two headwinds developed this week. The first was a report in the Wall Street Journal that children might be moving away from DIS programming, which is at the very core of the company's media-merchandise-parks business. The second was word Charter Communications, Inc. (NASDAQ: CHTR ) is offering a "skinny" sports-free television bundle, a possible start to a trend to fight cord cutters moving to streaming and "over the top" services.
Disney is also being negatively affected by the rise in television/movie production costs as the likes of Netflix, Inc. (NASDAQ: NFLX ) and Amazon.com, Inc. (NASDAQ: AMZN ) aggressively create their own exclusive content. And they are also moving in on the merchandising turf as well, with Stranger Things being the perfect example .
DIS will next report results on Aug. 8 after the close. Analysts are looking for earnings of $1.58 per share of Disney stock on revenues of $14.66 billion. When the company last reported on May 9, earnings of $1.50 per share beat estimates by 9 cents on a 2.8% rise in revenues.
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