As ‘Black Widow’ sets a pandemic opening record, should you invest in Disney stock?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Jul 12, 2021
Updated: Jul 21, 2021
  • Marvel’s ‘Black Widow’ film smashed ‘F9’s’ pandemic opening weekend record of $70 million with $80 million.
  • The film is distributed by Disney’s Walt Disney Studios Motion Pictures.
  • DIS stock price reacted positively, surging more than 2.5% on Monday. Should you buy DIS shares?

Walt Disney Co. (NYSE:DIS) shares on Monday spiked 2.5% following the weekend release of Marvel’s ‘Black Widow’ film. The film premiered this weekend, breaking the record for a pandemic opening with $80 million in domestic ticket sales. 

Disney is the primary distributor of Marvel films and stands to benefit significantly as more films premiere in the coming months. Black Widow’s success sets a good precedence for the other films to follow. 

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Marvel will release four more movies before the end of the year. Therefore, DIS stock could witness more upward movement. 

Why buy DIS shares in July 2021?

Disney stock could rally significantly before the end of the year amid the easing covid-19 situation and more film releases. 

With the success of the Black Widow film, reports indicate that Disney could decide to extend Premier Access, a package in its streaming service. It could decide to roll out more movies concurrently in theaters and to its subscribers.

Black Widow reportedly garnered $60M in Disney+ Premier Access rentals. The Premier Access package that lets subscribers stream new movies for $30.00 the day they premiere in theaters. The record-breaking figures could convince the network to extend its hybrid film distribution system beyond ‘Jungle Cruise’, the only film in the pipeline after Black Widow.

From a valuation perspective, DIS shares trade at a forward P/E ratio of 35.35. The valuation multiple could improve further based on earnings expectations. Analysts estimate Disney will post a bottom-line growth of 112% next year. 

Source – TradingView

Technical overview: DIS rebound seems poised to continue

Technically, Disney shares bounced back after an impressive weekend box office from Marvel’s Balc Widow. However, the stock is yet to hit overbought conditions in the 14-day RSI, leaving more room for extended gains.

Investors will target profits at approximately $186.78 or higher at $192.97. The key support levels are $176.70 and $170.71.

Bottom line: the catalyst for buying DIS stock in Q3 2021

In summary, Disney shares appear to be enjoying a solid rebound after recent movie releases. The pipeline is only going to get hotter heading into the latter stages of the year. 

Therefore, it may be best to invest in DIS stock now ahead of a busy schedule of movie releases.

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