4 things to watch out for on Disney Investor Day
Walt disney (NYSE: DIS) might not be pulling all cylinders these days, but it’s more than enough to wow Wall Street. The stock hit new all-time highs at the end of last week, and this week it will need to win over the recent highs.
Disney is hosting Investor Day 2020 on Thursday afternoon. It’s barely a month since the entertainment baron offered a financial update with his fourth quarter financial report, but that doesn’t mean he won’t have anything new to say. Let’s go over some of the things investors should watch out for on Thursday.
1. Is growth slowing at Disney +?
It will be difficult for any new streaming service to get past the Disney + rookie season, closing its first year of availability with 73.7 million paying subscribers for the streaming video service. The success of Disney + is largely what kept Disney afloat, but it will also be a difficult act to follow.
The streaming platform had a monster the first year, but it’s also going to be a difficult act to follow. Disney + average revenue per user fell in Disney’s last quarter, largely because a good chunk of the period’s net additions came from India where subscribers pay – on average – less than $ 2 per month for the platform.
We also can’t forget the Disney visa holders, Disney annual pass holders, and D23 fan club members who paid for one year of discounted service before the service launched. Some Verizon wireless customers also got a year free. This is Disney’s first retention rate test, and it may offer some perspective during Thursday afternoon’s webcast.
2. Will the Disney studio follow WarnerMedia’s lead?
from disney Soul will compete with Warner Bros. ‘ Wonder Woman 1984 like the big digital debuts of Christmas Day. Soul was withdrawn from its theatrical release in November and will air exclusively on Disney +. Wonder Woman 1984 will be on HBO Max, but it will also stream to your local multiplex.
WarnerMedia is embarking on its new take on digital distribution, recently announcing that its entire 2021 movie slate will air via HBO Max on the same day it hits the big screen. It’s an interesting approach, even if it guarantees low box office revenue.
So far Disney has tried to sell Mulan as a digital stream of $ 30, followed by Soul available to Disney + members at no additional cost. Neither film has been released in an American theater. He’s pushed back many releases from this year until 2021. He is expected to provide some insight into how his digital-centric strategy will play out over the coming year.
3. Is Disney World bouncing back?
Disney’s theme park segment was a drag on performance during the pandemic. The original Disneyland in California has yet to reopen since it closed in mid-March, and since that process is not in the media giant’s hands, it likely won’t have much to say on that front. .
Disney will be more talkative about the way things are going in Florida. Disney World has been welcoming visitors to its four theme parks since mid-July. He revealed last month that he had increased its capacity to 35%, but the station is still not profitable.
Is it starting to turn? The hours are extended for the holidays, and as someone who has visited the parks about two dozen times since they reopened, I can attest to other observations that crowd levels at Disney World are definitely starting to increase. Are we moving closer to profitability?
Much like its studio entertainment division, the openings of new rides have been delayed, with some upcoming attractions being fully suspended. Disney has an impressive lineup of rides it can open in 2021 if it thinks the debut won’t be wasted with low attendance under less than ideal operating conditions. If it proposes an opening date of 2021 for any new race beyond its Ratatouille-Dark ride theme, that would be a very encouraging sign.
4. When will the dividend return?
Payments are a thing of the past at Disney these days, but it won’t always be so. It made nix consecutive semi-annual distributions, but things should be dire enough that the House of Mouse doesn’t reintroduce a dividend at some point next year.
Right now, that’s the right call, and not just because Disney can use the $ 1.6 billion it pays out every six months. Dividends are a bad aspect when he fires people everywhere, from his theme parks to ESPN. However, with Wall Street expecting the company to recover as well as its stock prices, it is only a matter of time before distributions return. Become a dividend shares again would attract income investors at the very least, although its performance has never been a strong selling point for Disney. If Disney can come up with a potential timeline or at least the things that would need to happen for payments to pick up, that would make this week’s Investor Day even more interesting.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.