Up 30% Over The Last Month, Is Walt Disney Stock Poised To Rally Further?

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Walt Disney

Walt Disney stock (NYSE:DIS) stock has rallied almost 31% over the last month (21 trading days), considerably outperforming the S&P 500 which remains up by roughly 12% over the same period. The stock also remains up by about 14% over the last week (five trading days). The recent rally follows Disney’s stronger than expected set of Q3 2022 earnings driven by a rebound in the company’s theme parks and resorts business. While revenue rose 26% year-over-year to $21.5 billion, adjusted EPS came in at $1.09, up 36% versus last year. Disney’s streaming business – although still loss-making – also appears to be making solid progress. Disney+ ended the quarter with a stronger than expected 152.1 million subscribers, up by 31% versus last year. Disney also appears increasingly confident about its streaming value proposition,  bumping up pricing on Disney+ to $11 per month in the U.S., up from the current $8 per month from December, while planning to introduce a new ad-supported tier at $8 per month. Disney’s relatively attractive valuation (the stock trades at 22x consensus 2023 earnings) and the company’s improving monetization prospects of its currently loss-making streaming business, could also be making the stock appear more attractive to investors.

However, now that Disney stock has seen a gain of almost 31% over the last month, will it continue its upward trajectory in the near term, or is a decline imminent?  Going by historical performance, there were no instances in the last 10 years when Disney stock saw a trailing 21-day rise of 31% or more. Given how unlikely such an exceptional stock price movement is, we looked at the 32 instances where DIS stock saw an unusual jump of 20% or more over a 21-day period. 19 of these instances resulted in DIS stock rising over the subsequent one-month period (21 trading days). This historical pattern reflects 19 out of 32, or about 59% chance of rise in Disney stock over the next month. See our analysis on  Disney Stock Chance of A Rise for more details.

With inflation rising and the Fed raising interest rates, Disney has fallen 20% this year. Can it drop more? See how low can Disney stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

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What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Aug 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 DIS Return 17% -20% 19%
 S&P 500 Return 4% -10% 92%
 Trefis Multi-Strategy Portfolio 8% -7% 268%

[1] Month-to-date and year-to-date as of 8/16/2022
[2] Cumulative total returns since the end of 2016

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