The Walt Disney (DIS) stock price jumped sharply in extended hours on Wednesday after the company published strong quarterly results. The shares rose by $10 to $147, bringing its total market cap to over $268 billion. They are still about 22% below the highest level in 2022.

Disney earnings review

Disney is a large media and entertainment company that has a presence in many sub-sectors. That diversification helped the company to offset some of its losses during the pandemic. For example, while many theme parks closed, the company’s streaming business saw a record growth.

Disney published its Q1’22 results on Wednesday. The firm’s total revenue jumped to $21.82 billion, which was better than the $16.25 billion that it made in the same quarter in 2020. The results were also better than the median estimate of $20.27 billion. Its diluted earnings per share rose to $1.06 from the previous 76 cents.

Still, analysts remained focused on Disney+, the company’s important streaming product that was launched in 2019. The product added 11 million customers in the quarter even as Netflix additions disappointed. As a result, it now has 129.8 million customers, which is an impeccable performance for a service that is barely three years old. ESPN+ has over 21 million paid subscribers.

Disney expects that the company will have between 230 million and 260 million subscribers by the end of 2024. That growth will mostly be driven by the company’s international expansion considering that it is now available in a handful of countries.

In a statement, the management attributed the strong performance of Disney+ to several films like Encanto, Luca, and West Side Story.

Meanwhile, Parks, Experiences, and Products segment had an operating income of $2.6 billion, while the Media and Entertainment Distribution division had an income of $600 million. 

Is Disney a good investment?

The Disney stock price has not done well in the past few years because of the company’s conglomerate nature. Some parts like theme parks and cruise liners have been burning cash because of the falling demand.

However, things are starting to change and the company will likely see strong results going forward. As the world reopens, analysts believe that the company’s theme parks will see more visitors. Similarly, its cruise business is expected to see more guests in the coming months.

All this will likely happen as the Disney+ product continues growing internationally. However, some analysts have noted a risk to the company’s streaming success. For one, Disney has automatically included Disney+ and ESPN+ in one of its Hulu offerings at a slightly higher price. While this is an ingenious way, it risks being a slippery slope by offering people products that they don’t necessarily want.

Analysts have had mixed ideas about Disney. For example, those at Morgan Stanley, Moffett Nathanson, Guggenheim, Loop Capital and Wells Fargo have recently downgraded their target. The only analyst bullish on the stock is from Tigress Financial. 

Disney stock price forecast

The Disney stock price has done well in the past few days. It has managed to rise from a low of $129.68 to a high of $157. On the daily chart, the shares have managed to move above the 25-day and 50-day exponential moving averages (EMA) while the Relative Strength Index (RSI) has moved close to the overbought level.

Therefore, there is a likelihood that the DIS stock price will keep rising in the coming days. If this happens, the next key resistance level to watch will be at $160. 

The daily DIS price chart