Guy says the divergence between Netflix and Disney is abundantly clear.
Guy says Disney has to effectively hold at $90 to trade the stock from the long side.
Dan thinks Disney will break $90 and says that he doesn't see a lot of risk in buying the stock once it's in the $80s.
Dan says it's still Disney and you would be buying the stock at 10 year lows.
Guy says Disney has to effectively hold at $90 to trade the stock from the long side.
Dan thinks Disney will break $90 and says that he doesn't see a lot of risk in buying the stock once it's in the $80s.
Dan says it's still Disney and you would be buying the stock at 10 year lows.
Category
🗞
NewsTranscript
00:00 These are peak losses.
00:01 They are, in fact, adding subscribers.
00:03 That's a good thing.
00:04 Guy, do we look through this?
00:06 So it's a binary yes or no.
00:08 The answer is no, you shouldn't believe them.
00:10 And what we're seeing here is exactly what Tom Rogers has been talking about for a long
00:15 time, but specifically for the last five or six months.
00:18 And now the divergence between Netflix and Disney is abundantly clear, and Tom's done
00:22 a great job.
00:23 So no, you shouldn't believe them.
00:25 When you miss on the-- listen, EPS came in at $0.30.
00:28 They missed by 46% on EPS, and a revenue miss.
00:33 That's not good.
00:34 And then, OK, they added subscribers.
00:35 Problem is, ARPU for Disney+ was $3.91.
00:38 Street was looking for $4.24.
00:42 That's not good.
00:43 The only compelling case you can make now-- by the way, Disney was in the D&MI Dawn trade,
00:47 which now is becoming Dawn of the Dead trade.
00:49 I beat you to that punch, because that's exactly what's going on.
00:52 This is a level we traded down to in March of 2020-ish.
00:57 So it's got to hold effectively $90 to trade the stock from the long side.
01:01 That seems like an important milestone, Carter.
01:02 It is.
01:03 In fact, it's basically where it was in 2015.
01:06 So you've got a stock that's done nothing, which is representing major underperformance
01:10 in the market.
01:11 But it's also a stock that now is at risk of breaking to and below its June low.
01:16 So we know the stock market makes a June low, that it breaks that low in October.
01:20 Disney never made a low in October, and now that prospect is at hand.
01:24 So now streaming is actually a headwind, a discount.
01:28 It is.
01:29 I mean, what did we just hear?
01:30 So we heard a couple of things about an ad-supported model.
01:32 They have 100 advertisers.
01:33 If there's ever a better company to kind of line them up, I couldn't think of it than
01:36 Disney here.
01:37 They have a higher priced tier, so they're going to raise prices.
01:41 If you look at Disney+, ESPN+, and Hulu, they have more monthly paying subscribers than
01:47 Netflix does.
01:48 And I would argue that they have a far greater reach and a far greater potential.
01:53 I cut the cord, OK?
01:55 And you know how I get my cable?
01:56 Through Hulu.
01:57 And I have a package there that--
01:59 Guy has no idea what you're talking about.
02:01 Well, I'm just saying that.
02:02 And I've been doing that for a few years now.
02:03 So to me, I actually think that to these guys' point, it's going to break that 90.
02:07 That's that double bottom from this year.
02:09 You have to go back to March of 2020, and it is that low during the pandemic, which
02:13 was $80.
02:14 And if you get to the low end, I just don't see a lot of risk, guys, with the handle on
02:17 this thing.
02:18 I'm just telling you, if you start buying it in the high 80s all the way down to the
02:21 80, that panic low, and I really do think, again, we can say that estimates are coming
02:26 down.
02:27 That was the biggest miss in EPS since the '90s.
02:28 They missed revenue by 5%.
02:30 You know, this headwind, that headwind, whatever.
02:32 It's still Disney.
02:33 And if you're buying this thing at some point at 10-year lows, which is what you're going
02:37 to be doing, I think it's probably not a bad opportunity.
02:40 But there's not enough capitulation yet, right?
02:41 The street is still-- I mean, the street, one year ago, had a $200 price target.
02:45 Now it's $145.
02:46 But that's going to come--
02:47 That's going to come down.
02:48 Can't we make the argument, though, for all of these stocks?
02:50 We're looking at them as individual names that are reacting to their own specific fundamentals
02:55 here.
02:56 And there's been some dispersion.
02:57 And there's been some, basically, rotation out of tech and media and stuff like that.
03:00 But the capitulation has to come as a monolith, OK, as the market.
03:05 And that's why we're not going to bottom this month or last month or anything like that.