Shares of The Walt Disney Company (NYSE:DIS) fell more than 4% on Wednesday, extending the losing streak for the year. The decline followed an earnings report by Netflix that showed a subscriber outflow of 200,000 in the first quarter of 2022. As a company heavily dependent on streaming revenues, Disney’s investors grew cautious, sending the stock lower.
Investors are reading from the same scripts for both Netflix and Disney. Last month, Disney announced a pause on all its businesses in Russia, a factor that has contributed to the falling stock price. Similarly, Netflix attributed the lower subscribers to the suspended Russian service.
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With inflation biting on the consumer incomes, combined with halted operations in Russia, investors will remain cautious on Disney stock. The company reports earnings on May 11, 2022, with expectations of $1.22 per share in the quarter. Although higher than $0.79 per share in the previous quarter, investors could turn to subscriber growth, even if it posts an earnings beat.
Disney technical analysis shows stock sliding to $117
Technically, Disney is bearish and is aiming for the $117 support. The level coincides with an RSI of 32, as more investors relinquish their holding. Despite approaching the oversold level, the stock is currently on a free fall and would settle at $117.
Below the level would depend on the quarter results in May. If results come meek, we could see more sell-offs below the support to the next level at $98. For now, investors should keep off for a chance to buy low if the earnings come exciting.
Summary
Disney stock is trading lower due to concerns about weak subscriber growth following the Netflix earnings report. The stock could continue trading lower to find support at $117. Investors should keep off the stock for now.
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Source: https://invezz.com/news/2022/04/21/disney-stock-eyes-117-as-netflixs-subscriber-outflows-urge-caution/