Disney Stock Prediction: All it Takes is Faith and Trust and a Little Bit of Pixie Dust

Samantha Fischler is a Financial Analyst at I Know First. She is currently a candidate for her bachelor’s degree in Accounting with a Concentration in Finance at Binghamton University.

Disney Stock Prediction: All it Takes is Faith and Trust and a Little Bit of Pixie Dust


  • Disney experienced a slow summer due to its new tiered ticket prices
  • Disney’s BAMtech investment will help offset the loss of subscribers to ESPN
  • The company extended its contract to have exclusive streaming rights to the Oscars
  • DIS had a strong Q3 Earnings Report
  • I Know First is bullish on DIS

Walt Disney put it best when he said “First, think. Second, believe. Third, dream. And finally, dare.” While Disney’s stock price has been declining since hitting its all time high in November 2015, recovery is underway for the Burbank, California based multi-national mass media and entertainment company.

Disney Stock Prediction


Slow Summer

Summer is a time when kids are off from school and everyone is looking to get away. The combination of the two makes Disney World and Disneyland seem like logical choices for any family. And usually families follow this logic with the summer being peak time for trips to amusement parks, with Disney’s Magic Kingdom in Orlando, Florida being the most visited theme park resort in the world…. Until this summer, that is.

Disney Stock Prediction

Back in February, Disney implemented a new tier-ticket pricing system that aimed to bring Disney more revenue, but instead it made going to Disney’s parks less affordable for families. For the last 28 years, Disney has consistently raised the price of single day tickets once a year. Let’s talk about single-day passes for an adult to Disney World’s Magic Kingdom as an example. On a “value” day, the price of a ticket to Magic Kingdom is $105. On a “regular” day, the price goes up to $110. On a “peak” day, ticket prices surge to $124. For the peak season, the price increase is about 18%, which makes Disney World when kids are off from school less affordable for many families.

Similarly, Disney made some changes that effect annual pass holders. At Disneyland in California, the price of an annual ticket rose over 35% to an exorbitant price of $1,049. Are the regulars planning on driving to Disneyland? Most likely. Well, Disney raised the price of parking by $1 too. Do the regulars enjoy their dining experiences in the park enough to spend $75 annually to receive discounts at restaurants in the resorts? Yes. Do those same Disney frequenters enjoy these Disney dining experiences enough to now pay $150 for the same thing? Probably not.

The best time for adults to go is September because kids aren’t off from school, leaving the parks much less crowded during the summer months. Since September is an off peak time to visit the theme parks, tickets are more affordable too. Adults heading to Disney in September will likely help Disney recoup after experiencing a rough summer.

Streaming Disney

ESPN subscriptions have been sliding at a fast pace of 10 million subscriptions in 3 years. In hopes of counteracting ESPN’s troubles, Disney is exploring cord-cutting, where people are forgoing TV subscriptions for internet based television services.  Disney made a major investment in BAMtech of $1 billion and now owns 33% of the company. BAMtech is a streaming service controlled by the MLB and NHL.

Oscars Exclusive 
abc_2013_logo_gold-svgOn August 31, Disney announced that its ABC Network extended its contract and will continue to have broadcasting rights for the annual Oscar awards. ABC’s broadcasting rights were set to expire in 2020, but the network will now have rights until 2028. Despite this announcement, in the days following the announcement DIS continued to decline. This is likely due to the decline in Oscar viewers this year, down 8% from the 2015 to a still impressive 34.3 million viewers. This is the lowest amount of viewers in 8 years.


Disney Stock PredictionAdditionally, Disney’s ABC Television Group hired Bruce Rosenblum to serve as the president of business operations. His role entails global distribution, digital media, strategy, etc. for a whole host of networks that are under Disney, including Disney Channel and ABC. He previously worked for Warner Brothers and will bring his experience to Disney to improve ABC Television Group.



Disney is always working hard to maintain its attractions and constructing new attractions in its theme parks worldwide. While temporarily, it may ruin the aesthetics of certain areas of the parks and create longer lines for other attractions, in the long run, it is well worthwhile. It will help Disney keep the rides open longer because they are preemptively repaired. Additionally, new attractions will garner continued interest in repeat trips to Disney world.

Q3 Earnings

On August 9, Disney release its fiscal Q3 2016 earnings report. The report for the quarter ended July 2, 2016, showed $2.6 billion in revenue up year-over-year by $114 million. Diluted earnings per share increased markedly by 10% year-over-year, ending Q3 2016 at $1.59.

Where specifically did Disney show growth? The segment with the strongest year-over-year growth was the Studio Entertainment segment, with a 40% revenue increase since June 27, 2015. This year, Disney released some high-earning movies including Captain America: Civil War which brought in over $1,152,300,000. Another notable release was the long awaited movie, Finding Dory, which yielded upwards of $915,700,000.

Another segment that showed growth was the parks and resorts segment. Despite the new tiered pricing system, Disney’s parks and resorts brought in 6% more revenue than the prior year. This is partially due to Disney opening a new theme park in Shanghai, China. While the park didn’t open until mid-June, tickets went on sale for opening day back in March and sold out within hours. The park’s two hotels were both booked to capacity for the first two weeks that the park was open. During the August 9th earnings call, Disney CEO Bob Iger noted that over 1 million people had already visited the park and that the first round of construction was already underway, adding hotels, land, and new attractions. Analysts expect that in Disneyland Shanghai’s first year of operations, 10 million people will visit the massive 963-acre park. One thing to note about the Shanghai park is that it is the cause of Disney’s lower than usual operating income from international operations due to building and preparing to open the park, which was a very capital intensive feat.


Disney is likely to turn around from its near year of decline and show positive growth going forward. The company has a lot going for it after strong Q3 earnings, it taking on the cord cutting trend with its BAMtech investment, the opening of the Shanghai theme park, etc. Yes, Disney has been on the decline for some time now and has burned many investors. Rafiki from Disney’s The Lion King had the right idea when he said, “Oh yes, the past can hurt. But, the way I see it, you can either run from it… or learn from it.” Disney is already working to correct its mistakes and send their stock price back up.

In a 1- year forecast dated January 14, 2015, I Know First’s algorithm indicated positive growth for DIS. On January 14, 2016, DIS had returned 5.39%, showing the accuracy and precision with which I Know First has recommended Disney to investors in the past.

Disney Stock Prediction

What’s the takeaway message? As said by Walt Disney himself, “If you can dream it, you can do it. Always remember that this whole thing was started with a dream and a mouse.” As long as Disney keeps imagining, dreaming, creating, and working to achieve growth, the powerhouse of imagination and ideas will continue to exhibit growth and bring investors strong returns. Going forward, I Know First’s maintains a bullish stance on Disney.

Disney Stock Prediction

I Know First’s algorithm forecasts how stocks are going to perform for 3 days, 1 month, 3 months, and a year. In the case of Disney (DIS), the middle row represents the signal strength and the bottom number represents the predictability indicator, the historical correlation which is heavily weighted on the algorithm’s recent predictions. To learn more about how I Know First’s algorithm operates, click here.