The Walt Disney Co. (NYSE:DIS) stock traded lower Thursday as investors weighed a European patent ruling, renewed calls for a corporate restructuring and fresh regulatory uncertainty surrounding its media business.
The broader market was also under pressure, with the Nasdaq down 2.06% and the S&P 500 declining 1.41%.
Disney Faces Second European Patent Injunction
InterDigital Inc. (NASDAQ:IDCC) said Thursday that the Düsseldorf Local Division of the Unified Patent Court awarded a second patent injunction against Disney.
The ruling confirms the validity of the patent and covers High Efficiency Video Coding (HEVC) video encoding technology across 11 European Union countries. Disney can appeal the decision.
"Encoding for HEVC is a key component of the high-quality, premium viewing experience that streaming companies like Disney use to justify higher subscription prices," Josh Schmidt, InterDigital’s chief legal officer, said in a statement.
Investor Calls For Disney Restructuring
Separately, Gerber Kawasaki CEO Ross Gerber renewed calls Tuesday for changes at Disney’s management and business structure.
Responding on X to data shared by Creative Planning’s Charlie Bilello showing Disney stock fell 10.93% over the past 11 years while the State Street SPDR S&P 500 ETF Trust (NYSE:SPY) gained 320.1%, Gerber wrote, “Break up the mouse house or sell it.”
Gerber also said Apple Inc. (NASDAQ:AAPL) should acquire Disney or that the company should exit the entertainment business.
Analysts See Value In Disney Assets
Last week, Wells Fargo analyst Steven Cahall said Disney could unlock roughly 40% upside by exiting streaming and returning to its legacy content licensing model.
The firm maintained its Overweight rating on Disney shares while lowering its price forecast.
Separately, Federal Communications Commission Chairman Brendan Carr said streaming services, including Disney’s ESPN, could face regulatory hurdles when bidding for 2030 FIFA World Cup broadcasting rights. Carr said major sporting events should remain available over free over-the-air television.
Technical Analysis
The stock remains in a longer-term downtrend. The stock trades 11.6% below its 200-day simple moving average of $105.12 and 7.1% below its 50-day simple moving average of $100.04. It also remains below its 20-day simple moving average of $96.90, signaling that recent rallies continue to face selling pressure.
Momentum has weakened in recent sessions. The moving average convergence divergence (MACD) indicator remains below its signal line, while the histogram is negative. That suggests bullish momentum is fading and buyers will likely need to push the stock back above key moving averages to improve the technical outlook.
Disney shares are also trading near the lower end of their 52-week range of $92.19 to $123.40. That makes the next move especially important for traders. A sustained break below the low-$90s area could trigger additional selling pressure. A rebound that fails near the $100 level would reinforce the recent pattern of selling into strength.
- Key resistance: Around $105, near the 200-day simple moving average, where previous rebounds have struggled.
- Key support: Around $92, which aligns with the stock’s 52-week low and could attract buying interest.
Earnings In Focus
Walt Disney is scheduled to report second-quarter results on August 5. Analysts expect earnings of $1.86 per share, up from $1.61 a year earlier. Revenue is projected to rise to $25.44 billion from $23.65 billion.
The stock carries a consensus Buy rating with an average analyst price forecast of $125.42. Recent analyst actions include:
- UBS maintained Buy and lowered its price forecast to $133 on July 20.
- Barclays maintained Overweight and reduced its price forecast to $110 on July 14.
- Benchmark initiated coverage with a Buy rating and a $115 price forecast on July 13.
Walt Disney Price Action
DIS Price Action: Walt Disney shares were down 3.02% at $92.97 at the time of publication on Thursday. The stock is trading near its 52-week low of $92.18, according to Benzinga Pro data.
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