Shares of the Walt Disney Co. are down more than 60 percent so far this year and aren’t expected to recover anytime soon as the company is likely to announce a “painful cycle” of earnings cuts in the months ahead that will make the stock look even more unattractive to investors, according to a new report.
Barron’s said Disney shares have a “tough road ahead” and aren’t likely to rebound anytime soon. Even at its depressed levels, the stock is still “too pricey” for value investors, and isn’t expected to grow fast enough for growth investors, leaving it somewhere in investor limbo.
Adding to the challenges is the likelihood Disney will have to adjust its earnings estimates down in the coming quarters to align with Wall Street’s expectations.
“Another painful cycle of cuts to earnings forecasts appears to be in the cards for Disney’s fiscal 2023, meaning the shares will have to fall further or their price-to-earnings ratio will rise, making the stock look even more expensive,” Barron’s said.
As Breitbart News reported, Disney recently reported fiscal fourth quarter earnings that fell significantly short of expectations, sending the stock tumbling in what was its worst trading day in two decades.
Shares of the Walt Disney Co. plummeted late Tuesday and into early Wednesday to their lowest level in nearly a decade as concerns mount over the company’s profitability and wild spending habits on Disney+ and other streaming services. https://t.co/MiQhdlv97F
— Breitbart News (@BreitbartNews) November 9, 2022
Disney followed up by enacting layoffs, a targeted hiring freeze, and travel limitation on its employees. In a letter to top company executives, Disney CEO Bob Chapek said the austerity measures will be “difficult” but necessary.
“I am fully aware this will be a difficult process for many of you and your teams. We are going to have to make tough and uncomfortable decisions. But that is just what leadership requires, and I thank you in advance for stepping up during this important time,” he wrote.
Disney’s financial woes come after the company embraced woke LGBTQ identity politics, embracing transgenderism by putting trans characters in its entertainment for children.
The company also picked a political fight with Florida Gov. Ron DeSantis (R) earlier this year over the state’s Parental Rights in Education Law, which prohibits the teaching of sexuality and gender ideology — including transgenderism — to children in kindergarten through third grade.
Caving to pressure from a small group of radicalized employees, Chapek condemned the law and pledged that Disney would embrace radical LGBTQ activism going forward.
Follow David Ng on Twitter @HeyItsDavidNg. Have a tip? Contact me at dng@breitbart.com
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