Walt Disney Stock at Support Zone – Bargain or Trap?

Walt Disney (DIS) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($99.59 – $110.07), 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 34.2% in average peak returns.

Yet, a support zone alone isn’t enough; rebounds are more likely when fundamentals, sentiment, and market conditions line up. How does that look for DIS?

Rebound Likely Amidst Strategic Realignment and Growth

Walt Disney’s Q4 FY25 adjusted EPS beat estimates, driven by record Experiences segment operating income and improved streaming profitability with sequential subscriber growth. Despite a slight revenue miss and theatrical segment operating income decline due to tough comparisons, “Zootopia 2” delivered a record opening, and “Avatar: Fire and Ash” is anticipated. Analysts maintain a “Moderate Buy” to “Strong Buy” consensus, with average price targets indicating significant upside from current levels. The company projects double-digit adjusted EPS growth for FY26, alongside increased capital returns. While linear networks face pressure, Disney’s diversified assets and strategic DTC focus position it for potential upside.

How Do DIS Financials Look Right Now?

• 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 the last 3 years for DIS was 2.5%.
• Valuation: DIS stock trades at a PE multiple of 19.3

*LTM: Last Twelve Months | For more details on DIS fundamentals, read Buy or Sell DIS Stock.

And What If The Support Breaks?

Disney is far from immune to big selloffs. The stock fell about 61% in the Dot-Com bubble and nearly 56% during the Global Financial Crisis. The inflation shock in 2022 hit it just as hard, with a drop around 61%. Even the Covid pandemic forced a steep 42% pullback. The smaller 2018 correction wasn’t mild either, cutting close to 16%. Disney’s scale and brand don’t make it crash-proof. When markets turn sour, losses stack up fast.

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.

Still not sure about DIS stock? Consider the portfolio approach.

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