Source: PaxForex Premium Analytics Portal, Fundamental Insight

Walt Disney's stock plummeted to its lowest point in nearly a decade last year, dropping a staggering 60% from its peak. However, a remarkable turnaround has ensued, with Disney's stock surging by 30% since the beginning of this year. But the pressing question remains: Is now the right time to invest in Disney?

Disney boasts a sprawling, multifaceted enterprise. When its various components synergize, Disney emerges as an industry juggernaut. With an unparalleled reservoir of content and a creative team adept at crafting hits based on beloved characters and franchises, Disney leverages these assets across its diverse media platforms, theme park attractions, and cinematic endeavors.

Yet, the complexity of its operations means that not all facets always align harmoniously. Disruptions in one segment can be offset by the strength of others. This dynamic was evident during the early stages of the pandemic when theme parks shuttered, and streaming surged, and conversely, when streaming growth plateaued and parks experienced a resurgence in demand upon reopening.

Achieving operational harmony requires finesse and meticulous organization. In recent years, Disney faced pressure across multiple fronts, leading to a loss of investor confidence in management. However, under the leadership of CEO Bob Iger, the company is regaining its footing. Iger's commitment to bolstering Disney's iconic parks, integral to the Disney experience, and the strides made in streamlining operations to ensure profitability indicate a positive trajectory. Moreover, Disney is reassessing its franchise strategy in response to underperforming films, granting creative teams greater autonomy to rekindle the enchantment associated with its content.

The latest quarterly results garnered investor approval, reflected in the uptick in Disney's stock. While the figures may not exude Disney magic, they signal a step in the right direction. Although revenue remained stagnant year over year in the fiscal first quarter of 2024 (ending Dec. 30, 2023), operating income surged by 27%, and adjusted earnings per share (EPS) rose from $0.99 in 2022 to $1.22 in 2023. Notably, the most significant improvement was observed in streaming losses, which narrowed from over $984 million in 2022 to $138 million in 2023. Iger's assertion that streaming will achieve profitability by the end of fiscal 2024 appears increasingly plausible, supported by the recent performance.

Moreover, Disney is grappling with the future of ESPN, a longstanding challenge due to its potential impact on the cable ecosystem. To address this, Disney, alongside Fox and Warner Bros. Discovery, struck a deal to launch a comprehensive sports channel priced at $50 per month. This initiative aims to attract dedicated sports enthusiasts willing to pay a premium for live event access, thereby offsetting the inevitable decline in cable subscribers.

It's important to emphasize that while these updates are indeed promising, they signify potential rather than current reality. Streaming operations still operate at a loss, and the anticipated launch of the new ESPN platform has yet to materialize. Meanwhile, the film studios are in the process of planning, developing, and producing content to bolster revenue streams.

Investors are placing their faith in the execution of these plans as articulated by management. With Bob Iger's formidable track record and unparalleled knowledge of Disney, investor confidence in the company's direction has strengthened.

Despite its upward trajectory this year, Disney's stock price remains 40% below its 2021 highs. Should Disney deliver on its commitments and strategies, the trajectory of its stock is likely to continue upward. Over the long term, Disney's stock has significant potential for growth.

As long as the price is above 105.00, follow the recommendations below:

• Time frame: D1
• Recommendation: long position
• Entry point: 113.63
• Take Profit 1: 120.00
• Take Profit 2: 127.00

Alternative scenario:

If the level of 105.00 is broken-down, follow the recommendations below:

• Time frame: D1
• Recommendation: short position
• Entry point: 105.00
• Take Profit 1: 100.00
• Take Profit 2: 95.00