Disney share price trades off trendline support after Q1 results

The long-term uptrend for Disney looks to resume with analysts and IG clients also favouring a long bias to trades on the stock.

The Walt Disney Company

First-quarter (Q1) 2020 results for Disney have been met with a positive after-hours response, with the share price posting a 2% gain in the all session.

Some of the salient features of the results are as follows:

  • Revenue +36% (Q1 2020 vs Q1 2019)
  • Net Income -23% (Q1 2020 vs Q1 2019)
  • Diluted earnings per share (EPS) from continuing operations -37% (Q1 2020 vs Q1 2019)
  • Disney+ subscribers 26.5 million (launched in November 2019)
  • ESPN+ subscribers 6.6 million (1.4 million in Q1 2019)
  • Hulu subscribers 30.4 million (22.8 million in Q1 2019)

Technical view

The share price of Disney has posted a bullish reversal off the 200-day simple moving average (SMA) (blue line on chart). This indication is a suggestion that the long-term uptrend may now be resuming. The stochastic has also reversed sharply out of oversold territory, a bullish short-term consideration. With the trend bias and short-term momentum appearing to be up, 149.70 and 154.20 become the next upside resistance targets from the move higher. 135.85 marks a short-term low, and should the price instead retrace to close below this level, the trend bias would need to be reassessed.

Client view

97% of IG clients with open positions as of 5 February 2020 expect the price of Disney to rise in the near term.

Broker view

A Thomson Reuters analyst poll has an average long-term rating of ‘buy’ for Disney as of the 5 February 2020.

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