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Is It a Good Time to Buy Disney Stock?

Walt Disney stock (NYSE:DIS) is well-positioned to weather an economic slump.

Much of the market is feeling the pull as US inflation remains persistently high, and federal interest rates are likely to rise over 5% in 2023. The S&P 500 (SNPINDEX: GSPC) has been down 20% since the beginning of 2022, but entertainment firms, in particular, are struggling. Netflix has plummeted 51% this year, while Warner Bros. Discovery has been down 47% in the same time frame. Disney stock  (NYSE:DIS) has done better but is still down 33%.

Disney Stock: Disney’s Streaming Business Is Expanding.

Walt Disney’s foray into the streaming industry began in earnest in 2009, when it bought a 27% share in Hulu. Since then, Disney has introduced ESPN+ and Disney+. Walt Disney also owns the India-focused streaming service Disney+ Hotstar and a 66% share in Hulu, with intentions to assume full control by the end of 2024.

Disney has approximately 221 million streaming users worldwide, behind global leader Netflix, which has 223 million members. However, other industry experts predict that Disney+ alone will have 284.2 million users worldwide by 2026, with Netflix behind at 270.7 million.

Disney Stock: Disney+ Is Introducing an Advertising Tier.

Disney will soon launch an ad-supported tier for Disney+, presumably to entice new consumers.

On December 8, 2022, the $7.99-per-month Disney+ Basic (With Ads) subscription will launch, providing full access to its collection of series and movies with around four to five minutes of ads for each hour of programming. Furthermore, no advertisements will run against children’s programs, and users will have access to the same features as other subscriptions, including 4K support. The pricing is the same as the existing Disney+ Basic plan; however, that tier will increase to $10.99 per month when Disney+ Basic (With Ads) launches.

Disney’s Park Business Is Thriving.

Disney was able to reopen several of its parks across the globe this year after extended COVID-19 lockdowns, and Disney fans have flocked back. The firm reported domestic hotel reservations at 90% occupancy in its fiscal 2022 third-quarter profits, and it expects to reach pre-pandemic levels in the following months. Disney also experienced an increase in park expenditure during the third quarter, with per-customer spending increasing by 40% when compared to the same time in 2019.

This year’s performance for Walt Disney stock  (NYSE:DIS)  through its streaming customers and park visitors implies that the company is well-positioned to weather this challenging economic era. If conditions deteriorate and the United States faces a recession in 2023, as some predict, Disney stock  (NYSE:DIS) will remain a strong long-term investment.

The growing subscriber base attests to the quality of the company’s content portfolio, and the new Disney+ ad-supported tier enables Disney stock  (NYSE:DIS) to raise pricing while lowering churn. Furthermore, with Walt Disney parks and hotels demonstrating their capacity to swiftly rebound, investors should be optimistic about the company’s long-term prospects.

Featured Image-  Megapixl @ Ralukatudor

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