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Trends & Analysis
News

Crude oil dips for 3rd session after supply data

News

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Buy the JPMorgan dip?

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Goldman Sachs shares surge after earnings beat

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Asset Watch

Will Walt Disney maintain its earnings momentum?

Tuesday, February 13, 2024

It was another celebration for Walt Disney on Feb. 8, as the stock soared on the back of strong first-quarter earnings. And as cost-cutting initiatives bolster the bottom line, the conglomerate’s restructuring efforts are paying off.
Walt Disney trimmed its streaming division losses from $1.05 billion in Q1 2023 to $216 million this year. The frugality led Bank of America analyst Jessica Reif Ehrlich to increase her price target from $110 to $130, saying she was “incredibly encouraged” that profit initiatives “are already having an impact.”
But while the stock has been a major underperformer over the last few years, has Walt Disney finally turned the corner?

When the company reported fourth-quarter earnings after-hours in November, the stock popped the following day. A red candle hit the day after, and support materialised near the 5-day moving average. Walt Disney then went on to rally by 11% off the pullback low.

With a similar pattern now present, a second act could be unfolding. After a sharp rally on Feb. 8, the stock closed lower on Feb. 9. Yet, the 5-day MA should keep rising in the days ahead, and if Walt Disney continues its correction or consolidates, the key level may act as support and spur further upside.

So, are two good quarters enough to turn sceptics into believers, or has Walt Disney run too far, too fast?


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