Walt Disney Stock Pulls Back to Support – Smart Entry?
Walt Disney (DIS) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($106.99 – $118.25), levels from which it has bounced meaningfully before. In the last 10 years, Walt Disney stock received buying interest at this level 6 times and subsequently went on to generate 26.4% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 12/31/2018 | 2.9% | 10 |
| 2/11/2019 | 5.3% | 11 |
| 3/20/2019 | 38.7% | 251 |
| 5/8/2020 | 16.6% | 31 |
| 6/26/2020 | 24.2% | 63 |
| 10/28/2020 | 70.4% | 131 |
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.
Markets reward quality over time, and that’s what High Quality Portfolio captures.
Here are some quick data points for Walt Disney that should help decision:
- Walt Disney Stock Pulls Back to Support – Smart Entry?
- Walt Disney Stock Near Crucial Support – Buy Signal?
- Walt Disney Stock at Support Zone – Bargain or Trap?
- Pay Less, Gain More: DIS, NFLX Top Warner Music Stock
- Disney’s Secret Weapon: How Streaming Can 2x The Stock
- Walt Disney Stock Pulls Back to Support – Smart Entry?
- Revenue Growth: 5.0% LTM and 5.3% last 3 year average.
- Cash Generation: Nearly 12.2% free cash flow margin and 14.8% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for DIS was 2.5%.
- Valuation: DIS stock trades at a PE multiple of 17.5
For quick background, Walt Disney operates worldwide as an entertainment company providing media distribution, theme parks, resorts, and related experiences through its global segments and subsidiaries.
| DIS | S&P Median | |
|---|---|---|
| Sector | Communication Services | – |
| Industry | Movies & Entertainment | – |
| PE Ratio | 17.5 | 23.6 |
|
|
||
| LTM* Revenue Growth | 5.0% | 5.4% |
| 3Y Average Annual Revenue Growth | 5.3% | 5.2% |
| Min Annual Revenue Growth Last 3Y | 2.5% | -0.1% |
|
|
||
| LTM* Operating Margin | 14.8% | 18.7% |
| 3Y Average Operating Margin | 11.9% | 18.2% |
| LTM* Free Cash Flow Margin | 12.2% | 13.3% |
*LTM: Last Twelve Months
What Is Stock-Specific Risk If The Market Crashes?
Disney isn’t immune to big sell-offs. It fell about 61% in the Dot-Com crash, 56% during the Global Financial Crisis, and nearly 61% in the recent inflation shock. Even smaller hits like the 2018 pullback and the Covid pandemic dragged it down 16% and 42%, respectively. Strong fundamentals matter, but when fear hits, Disney’s not off the hook.
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.