Week Ahead: Will Disney deliver enchanting earnings?

• Disney shares ↓ 25% from 2024 high

• Reports fiscal Q3 earnings on 7th August (before US markets open)

• Streaming and experience business in focus

• Shares could move 6.5% ↑ or ↓ post earnings

• Bearish on W1 timeframe but RSI near oversold

Another slew of corporate earnings and top-tier data awaits investors in the week ahead:

Saturday, 3rd Aug

• US500: Berkshire Hathaway earnings

Monday, 5th Aug

• CN50: China Caixin services PMI
• EU50: Eurozone PPI, HCOB Services PMI
• SG20: Singapore retail sales
• JP225: BoJ meeting minutes
• US500: US ISM Services index, San Francisco Fed President Daly speech

Tuesday, 6th Aug

• AU200: RBA rate decision
• EU50: Eurozone retail sales
• GER40: Germany factory orders
• NAS100: Airbnb, Super Micro Computer earnings
• US500: Uber earnings

Wednesday 7th Aug

• CNH: China trade, forex reserves
• NZD: New Zealand unemployment
• CAD: BoC meeting minutes
• US30: Disney earnings
• JP225: Softbank earnings

Thursday, 8th Aug

• GER40: Germany industrial production
• ZAR: South Africa manufacturing production
• TWN: Taiwan trade
• USDInd: US initial jobless claims, Richmond Fed President Barkin speech

Friday, 9th Aug

• CN50: China PPI, CPI
• CAD: Canada unemployment
• GER40: Germany CPI

Our focus lands one of the world’s largest and most well-known entertainment companies with a market cap of $170 billion.

Walt Disney Shares are down 25% from their 2024 high at 123.72, logging four consecutive months of losses after July's close. 

Despite the strong start to the year primarily driven by solid Q1 earnings, things started going downhill from April with disappointing Q2 results fuelling the downside.

Prices could push higher or lower depending on how investors react to the latest earnings report.

• When will earnings be published?

Disney reports its fiscal third-quarter earnings on Wednesday 7th August before US markets open.

• Market expectations

The entertainment company is expected to post earnings per share of $1.17 compared to $1.03 a year ago.

Quarterly revenues are seen rising to $23.1 billion from $22.3 billion in the prior year – equating to a 3.6% increase

• What to watch out for

When Disney published its Q2 earnings in May, it revealed an important part of its streaming business turned a profit for the first time.

However, the company warned that it expected weaker results in Q3. So, any upside surprises to its streaming segment will most likely be welcomed by investors.

In Q2, the experience side of the business (theme parks and cruise ships) saw revenues grow by 10%. Another set of positive results could boost confidence over its business outlook.  

• How will Disney react to earnings

Markets are forecasting a 6.5% move, either Up or Down, for Disney stocks post earnings on Wednesday.

• Technical picture

Disney shares are under pressure on the weekly charts with prices trading below the 50 and 100-week SMA. However, the Relative Strength Index (RSI) is near 30 – signalling that prices may be oversold.

On the daily charts, prices remain in a bearish channel but support can be found around 89.12.

• A decline below this point could encourage a selloff towards 79.50 and 78.21.

• Should 89.12 prove to be reliable support, this may encourage an incline toward the 50 and 100-daySMA.