Finally Disney cracked under $120 in yesterdays session, a level I wanted it to revisit after I took profits late last year around $138. I did miss the run up to the $150 area and at the time I thought the optimism around Disney+ was overpriced given it was going to require a lot of investment in the next couple of years and bring the fight to Netflix , but the pre-signup numbers were very strong and investors really took to the Disney revival.
It closed yesterday at $118.04 and pre-market today is indicating an open at $114.65. The 52-week low is at $107.23 and it’s interesting to consider getting back into Disney at that price.
The situation is not simple though. The COVID-19 situation now has all of Disney’s Asia theme parks closed and that is one of their biggest revenue generators. Not a disaster if it’s just short-term but at the moment the timescales are unclear.
Also in regard to Japan, there is a chance the Olympics gets cancelled and this would be a huge lost opportunity for the Tokyo Disneyland if this happens.
Last but not least, Bob Iger has stepped down as CEO and investor reaction to the new CEO, Bob Chapek, has been mixed with some criticism that an ‘operations guy’ won’t have the vision or creativity to drive Disney’s evolution.
Under normal market conditions I’d have definitely jumped in yesterday when it got under $120, but now I’m thinking of waiting for something close to that 52-week low and I believe there are probably many other investors out there who might also be eyeing price around $110 as a great value entry to a company at a near 30% discount to the high from last year.
If you’ve been looking at Disney I’d love to hear your views.
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