This week, Walt Disney Co (DIS) will be on Wall Street’s radar as the entertainment firm gears up for several big events.
The firm will open Shanghai Disneyland on Thursday, one of its classic rides will get a facelift and the hotly anticipated Finding Nemo spin-off, Finding Dory will hit the box office.
With so much going on this week, DIS stock could see a lift as investors consider whether Disney’s latest ventures will help it overcome its ESPN woes. Now could be a great time to buy DIS stock before the buzz sends the share price higher.
A Big Week for DIS?
With Disney’s newest theme park in Shanghai set to debut later this week, and most analysts agreeing it represents a huge opportunity for DIS stock, Disney stock should experience a nice rise.
The park keeps with Disney tradition by incorporating rides and attractions featuring the brand’s most popular franchises, but also caters to local tastes by offering local cuisine and tailoring accommodations to represent China’s culture.
More importantly for DIS shareholders, it will contribute to Disney’s theme park revenue, which has been forecast to expand up to 43% by 2018. The Shanghai location appears to be drawing a great deal of interest as well — data from Baidu Inc (ADR) (BIDU), a local search engine, showed that searches related to the amusement park were up 495% since February.
DIS stock could see a lift as the Shanghai location ramps up, not only because of the revenue it generates, but also because of the future marketing potential it gives Disney. Disneyland Shanghai will give the company a firm foothold in China, allowing the company to market its many franchises to a huge new market.
And there’s more to come for Disney.
Shortly after the Shanghai debut, Disney’s California Adventure and Epcot will see a classic ride, Soarin’, updated. The ride initially took visitors on a simulated hang-gliding tour around California, but the new version will include views from around the world. While this news on its own will do little to move the needle on DIS stock, it will add to buzz around the stock this week with so many other events keeping the firm in the news.
Disney Stock: Finding Profit
This week Disney is also slated to release Finding Dory, a spin-off of Pixar’s wildly popular Finding Nemo film. The movie is expected to draw in huge crowds and will likely become one of the highest grossing summer releases. This would be big news for DIS, as the firm is already responsible for three of the four highest grossing films so far this year.
If Finding Dory proves successful, it will give DIS bulls another reason to celebrate the firm’s extensive portfolio of well-known characters that will likely provide revenue streams far into the future.
This week’s news will give investors reason to consider a long-term position in DIS stock; however, the stock has a big, grey cloud hanging over it — ESPN. The firm’s most recent earnings miss has many investors worried about how the public’s abandonment of traditional cable will affect Disney’s media networks, especially ESPN, which has seen subscribers decline rapidly.
However, investors could be overreacting, as it isn’t all doom and gloom for the sports channel. ESPN has partnered with firms like Dish Network Corp (DISH) and Verizon Communications Inc. (VZ) in order to offer an online version and keep up with the changing media environment. ESPN has also upped its online game by improving its website and adding features to several different mobile apps.
Bottom Line for DIS Stock
While investors that buy DIS stock before the firm is in the headlines this week may benefit from a minimal lift, a long-term position is likely to yield sizable gains.
Disney stock is trading below $100, down from highs of $120, making it a good time to get on board. The company’s exposure to several different industries and solid performance over the last decade make it a good bet.
As of this writing, Laura Hoy did not hold a position in any of the aforementioned securities.