Disney: 2 Reasons for Purchasing This Stock in June (and One Reason for Choosing)

Disney: 2 Reasons for Purchasing This Stock in June (and One Reason for Choosing) ...

The Walt Disney Company Reportis is a "love it or hate it" stock right now. It''s a great business model, but it''s been facing some recent difficulties. As a result, investors'' opinions are divided.

Let''s take a look at two reasons why you might want to buy Disney stock in June, as well as one why you might want to wait.

Figure 1:Disney: Two Reasons for Purchasing This Stock in June (and One for avoiding)

Unsplash

Netflix Stock: Wall Street''s Bullish, A Bearish, and A Neutral Perspective (Read more from the MavenFlix

A Falling Stock With Growing Revenue

Lately, DIS has had a losing run. Year to date, the stock is down roughly 40%.

Figure 2: DIS stock yeart-to-date performance.

Yahoo Finance

The company is still profitable than many other major players in the streaming industry.

Get Netflix Inc. - For example, Reportstock lost more than 70% in 2022. However, unlike its main competitor, Disney continues to increase its revenue and the number of subscribers to its streaming platform.

However, Disney recorded lower-than-expected results for the last quarter. We can attribute a lot of its recent less-than-stellar performance to the fact that, post-pandemic, people aren''t seeing as much streaming media. In addition, Disney has been impacted by increased competition in the streaming industry.

We believe that in the long run, Disney will continue to increase its profits and generate value for investors, who might purchase shares cheap if they opt to buy in.

Wall Street Sees a Buy

Disney''s latest quarterly results surpassed analysts'' expectations. However, the streaming segment did not look as good as anticipated. According to TipRanks, the average price target for DIS is $147, based on 22 analysts, suggesting a substantial potential upside of 56%.

It''s worth noting that this price target was $155 last month, indicating that analysts may be feeling quite pessimistic about the company.

Even the pessimists seem to see the risk-reward transition as beneficial. On TipRanks, the stock''s lowest price target is $110, $20 above its current price.

Inflation Is a Problem

The video streaming industry is quite competitive, and businesses have had to keep prices low in order to attract customers.

Disney''s streaming services will likely face pressure to fall as inflation continues to rise, and the Federal Reserve raises benchmark interest rates.

Money-strapped consumers may more likely to devote their money to other purchases rather than movies and even trips to Disney''s theme parks.

Therefore, in the following months, anticipate DIS to be under a lot of pressure until the bear market calms down and the government manages to control inflation.

Our Take

When you''re considering adding DIS to your portfolio, it must be a long-term holding. Due to the currently weak market, you don''t want to bet all your chips on one company, even if you like its business model and believe it is inexpensive.

If you''re optimistic, buying Disney now might be a good option to get a decent company for a lower price. However, for short-term investors, avoiding the volatile market may reduce your chances of future losses.

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. A few affiliate links may be added, therefore these partnerships do not influence editorial content. Thanks for supporting MavenFlix.

You may also like: