November earnings recap: A cleaner, leaner Disney
Disney’s November quarter marked a clear inflection point for the company. Management reaffirmed that the multi-year turnaround is gaining traction, driven by disciplined cost control, profitable streaming progress, and resilient Experiences demand.
Adjusted EPS came in ahead of expectations, boosted by higher Parks & Experiences operating income and streaming losses narrowing faster than forecast.
The company guided for double-digit EPS growth in FY26, underscoring confidence in its core franchises, a leaner cost base, and expanding DTC profitability. CEO Bob Iger highlighted ESPN’s upcoming standalone app launch and the next wave of blockbuster releases as pivotal to reigniting growth.
Technical setup: A flag on the verge of resolution
Disney’s chart is coiling tightly within a classic bull flag, and the technicals suggest it’s itching to break higher.
- Price Action: DIS has reclaimed both anchored VWAPs—one drawn from the July impulse low, and another from the recent corrective high. That’s a powerful signal that buyers are regaining control and that supply has been absorbed.
- Structure: The stock has been consolidating in a well-defined flag between roughly $110–116, following its strong Q3 rally.
- Momentum: With RSI firming above 50 and volume tapering on dips, momentum compression is setting the stage for a move.
Trigger Level: A decisive daily close above $116 would confirm a breakout, targeting the base of the flag near $124—a level that coincides with prior resistance from mid-2023.
Support Zone: Watch $110–111 as near-term support. A sustained drop below would suggest the breakout setup is delayed, not invalidated.
In short: Disney’s chart is constructively wound—the kind of setup that often precedes a range expansion.
Catalysts that could power the move toward $124
The next two earnings cycles are loaded with potential EPS revision triggers that could fuel a breakout:
Streaming & ESPN DTC Upside
- What to watch: ESPN’s standalone app and cross-bundle adoption (Disney+/Hulu/ESPN+).
- Why it matters: A stronger ARPU mix or early ESPN DTC profitability could lift Entertainment & Sports segment OI and FY/FY+1 Adjusted EPS.
- When visible: As early as next quarter, via subscriber, ARPU, and margin trends.
Experiences Segment Momentum
- What to watch: Park attendance, per-capita spend, and cruise bookings.
- Why it matters: Experiences delivered record operating income in FY25, and with Disney Destiny and Adventure expanding capacity, another upside print could add EPS tailwind.
- When visible: Next earnings via forward bookings and occupancy metrics.
Studio Slate & Content Performance
- What to watch: Box office results for Zootopia 2, Avatar: Fire and Ash, and Toy Story 5.
- Why it matters: A strong release slate could boost Content Sales/Licensing and drive Disney+ engagement, while misfires could drag on near-term earnings.
- When visible: Immediately post-release and reflected in next two earnings reports.
Wildcard: Any extended carriage dispute or affiliate churn in Sports/Linear would be a near-term headwind. Management’s FY26 guide includes a hedge here, but investors should monitor renewal developments.
The takeaway
Disney is technically primed and fundamentally supported. With price reclaiming both VWAPs and a flag pattern nearing resolution, the setup favors a breakout toward $124 if upcoming catalysts deliver.
If streaming profitability, Experiences strength, or a hit film cycle confirm through the next earnings calls, DIS could quickly reprice higher—potentially breaking the flag and initiating a fresh leg up.
For now, $116 is the level to beat, and the next two quarters hold the evidence to justify it.
Summary:
- Pattern: Bull flag with reclaimed VWAPs.
- Trigger: Close > $116.
- Target: $124.
- Catalysts: Streaming margins, Experiences growth, blockbuster slate.
- Timing: Over next 1–2 earnings cycles.
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