DIS Near Crucial Support Level – Buy Signal Ahead
Walt Disney (DIS) should be on your watchlist. Here is why – it is currently trading in the support zone ($108.03 – $119.41), levels from which it has bounced meaningfully before. In the last 10 years, the stock received buying interest at this level 8 times and subsequently went on to generate 24.2% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 1/10/2019 | 2.2% | 43 |
| 3/20/2019 | 38.7% | 251 |
| 5/8/2020 | 16.6% | 31 |
| 6/26/2020 | 24.2% | 63 |
| 10/28/2020 | 70.4% | 131 |
| 8/3/2022 | 14.6% | 13 |
| 2/9/2024 | 13.3% | 53 |
| 5/23/2025 | 13.5% | 38 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For DIS Read Buy or Sell DIS Stock to see how convincing this buy opportunity might be.
Here are some quick data points:
- Revenue Growth: 5.4% LTM and 7.2% last 3 year average.
- Cash Generation: Nearly 11.6% free cash flow margin and 14.6% operating margin LTM.
- Recent Revenue Shocks: The minnimum annual revenue growth in last 3 years for DIS was 2.6%.
- Valuation: DIS trades at a PE multiple of 24.2
- Opportunity vs S&P: Compared to S&P, you get lower valuation, higher revenue growth, and lower margins
Walt Disney operates worldwide as an entertainment company providing media distribution, theme parks, resorts, and related experiences through its global segments and subsidiaries.
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| DIS | S&P Median | |
|---|---|---|
| Sector | Communication Services | – |
| Industry | Movies & Entertainment | – |
| PE Ratio | 24.2 | 23.5 |
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| LTM* Revenue Growth | 5.4% | 5.0% |
| 3Y Average Annual Revenue Growth | 7.2% | 5.8% |
| Min Annual Revenue Growth Last 3Y | 2.6% | -0.3% |
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| LTM* Operating Margin | 14.6% | 18.8% |
| 3Y Average Operating Margin | 11.6% | 17.7% |
| LTM* Free Cash Flow Margin | 11.6% | 13.2% |
*LTM: Last Twelve Months
That is one way to look at stocks. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
What Is Stock-Specific Risk If The Market Crashes?
That said, Disney isn’t immune to big drops. It fell over 60% during the Dot-Com Bubble and pulled back about 56% in the Global Financial Crisis. The inflation shock last year hit it nearly as hard, with a 61% dip. Even the Covid sell-off caused a 42% drop, while the 2018 correction saw a more modest 16% loss. Solid fundamentals matter, but when the market turns, Disney can still take a serious hit.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read DIS Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.