Disney's business consists of several areas. Moreover, the management of the company seeks to invest in all major core sectors. The company’s shares showed steady growth for several consecutive months, but after the last report of the management sank 5%. Now the value of one Disney security is approaching the mark of 138 US dollars. What caused the decline and what areas of the business showed negative results?
Two negative factors
In fact, the decline in profit was due to errors in two areas of business. After the launch of the new location in the Disney Theme Park, located in Anaheim, the number of visitors dropped by almost half. Naturally, the creation costs did not pay off, and the company was forced to fix a serious loss.
Problems began in the cinema, although in this case the general situation for the company does not look very deplorable. Firstly, the fourth part of the Toy Story franchise shows good financial performance. Secondly, the film "The Lion King" was successful. Thirdly, in the spring of this year, a fourth of the Avengers managed to set a box office record. This film has become the most successful in the world at the moment. However, problems came from another Marvel tape. The film “Dark Phoenix” showed disastrous results, affecting the universe of people X. Because of this picture, the company had to fix a loss. Naturally, this negatively affected the entire sector.
Unjustified expectations
Investors are not concerned about the decline in company profits, but about deeper problems. The fact is that many analysts predict a decrease in momentum for further growth. The company showed good financial results for several years in a row, but every year the situation became a little worse. Serious controversy is caused by a direct statement by management. The fact is that Disney management warned all investors about the beginning of problems in 2019. They predicted that the current year would be rather difficult for the firm. Firstly, the company was still not able to fully recover from the purchase of the studio "Fox Century 21". Secondly, a lot of financial resources are spent on creating a new Disney + service. As conceived by management, he should compete with Netflix.
Analysts Opinions
Large analytical companies managed to express their opinion on the situation with Disney. They advised the holders of the shares not to dispose of the assets and keep the acquired blocks. Some experts even recommend increasing the portfolio while Disney stocks are at low levels.
