Shares of Disney have seen a tough ride in 2022 dropping over 50% from its All-Time-Highs.

Overview

Disney is an American media and entertainment company, listed on the NYSE. Disney stock is currently priced at $97.43, which is a decline of almost 52% from its all-time high of $201.91 in March 2021. The company saw significant growth during 2020 due to Disney+, however, it has been downwardly trending since March 2021.

Financials

The total market cap of Disney comes in at $175bn. Disney’s revenue for the year ending March 2022 was $76bn, which is a 32% increase YoY, However, their net income for the year ending March 2022 was $470m, which is a decline of 47.84% from the previous year. Disney's total assets sit at $202bn while total liabilities sit at $108bn, therefore the company has a net positive of $94bn and a L/A ratio of 53%, which is reasonably strong. Overall, the Financials for Disney are relatively bullish, as shown by its strong revenue growth and good L/A ratio, and hence it may be well-positioned to rebound, even in this struggling economic climate.

Technicals

From a technical aspect, the stock is conflicting. Disney is struggling to find support at any level, having recently broken through previous levels, a further decline could see it tests support at $89, and then $83. RSI currently reads at 28, which indicates that the stock is oversold and hence is a bullish indicator. MACD is currently reading negative, as it has done for most of the time since March 2021, however, the divergence could soon turn bullish the gap between the Moving averages is closing in. Towards the upside, the initial target is $110, followed by $140, and then $176. Overall, the Technicals for Disney indicate that the decline in stock price may not have bottomed out yet, but that if support holds, we could see a push to the upside.

Summary

Disney like many other shares at this point in time could face prolonged financial challenges due to the macro climate. The technical analysis indicates that the decline in the price of the stock may not be over, and hence we could see lower levels before it rebounds. On the other hand, Disney’s strong financials put it in good stead to weather prolonged economic challenges; Therefore, the stock could be a good, discounted entry price for long-term investors. So the question is really do you get in now while it is cheap, or wait for another potential decline back to the 8 year support zone at $83-$87