DIS

Walt Disney reports Q3 numbers

What's Happening

Entertainment mogul Walt Disney ( DIS ) will report its fiscal third-quarter results after the market close August 7. Analysts forecast earnings of $1.97 per share, versus $1.58 during the same period last year. The stock has risen 1.7% on the year.

Technical Analysis

DIS was recently trading at $113.65 down $1.03 from its 12-month high and $17.45 above its 12-month low. InvestorsObserver's Stock Score Report gives DIS a 72 long-term technical score and a 69 short-term technical score. The stock has recent support above $111 and recent resistance below $114.5. Of the 13 analysts who cover the stock 3 rate it Strong Buy, 1 rate it Buy, and 9 rate it Hold. DIS gets a score of 64 from InvestorsObserver's Stock Score Report.

Analyst's Thoughts

Walt Disney has been strong over the last year, despite falling subscriber numbers for its ESPN sports network. Cord-cutting has hurt the company's pay-TV segment, but analysts expect the losses to slow as live sports programming is somewhat insulated from cord-cutting since sports have a zero-shelf life. While ESPN numbers have fallen, the company's strong amusement park and movie segments have managed to keep earnings and sales moving in the right direction and kept the stock trending higher. Analysts forecast earnings of $1.97, which is up sharply from last year's $1.58, and for the current year analysts forecast earnings growth of 13.9%, and per annum earnings growth of 6.4% for the next five years. The company's ability to grow earnings despite problems at ESPN should keep shares trending higher, but if the market sees a huge decline in ESPN subscribers the news could be enough to put a ceiling on the stock.

Stock Only Trade

If you're looking to establish a long stock position in DIS consider buying the stock under $114. Sell if it falls below $105.45 or take profits if it gets to $131.10.

Bullish Trade

If you want a bullish hedged trade on the stock, consider a 9/21/18 100/105 bull-put credit spread for a $0.45 credit. That's a potential 9.9% return (73.7% annualized*) and the stock would have to fall 8.0% to cause a problem.

Bearish Trade

If you want to take a bearish stance on the stock at this time, consider an 9/21/18 125/130 bear-call credit spread for a $0.3 credit. That's a potential 6.4% return (47.5% annualized*) and the stock would have to rise 10.2% to cause a problem.

Covered Call Trade

If you like the stock but wish to lower your cost basis on a new position, you may want to consider a 9/21/18 $115 covered call. Buy DIS shares (typically 100 shares, scale as appropriate), while selling the 9/21/18 $115 call for a debit of $110.47, per share. The trade has a target assigned return of 4.1%, and a target annualized return of 30.5% (for comparison purposes only).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Originally published on InvestorsObserver.com


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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