Walt Disney and Sony Stocks: Will Entertainment Industry Survive?
5 minutes for reading
There are plenty of companies and corporations in the entertainment sphere, and all of them are noticeable to some extent. However, today I have picked up the companies that are suffering from COVID-19, as many others are, but manage to stay the course. Its The Walt Disney Company (NYSE: DIS) and Sony Corporation (NYSE: SNE).
They are the giants of entertainment, video, and television. Each company has its activity streams but they are united in one sphere - the entertainment industry, in which they are the leaders. Each corporation has its specialties that help not only to survive the crisis but only make a profit in an unstable market situation.
Now, let us consider these companies and their stocks separately and compare the fundamental data to tech analysis. We will try to draw parallels between the corporations and forecast their future market behavior.
The Walt Disney Company
When the quarantine began, many people all over the world stopped going to the cinema and amusement parks; the Walt Disney Company was the one to suffer first, nonetheless, the company found a way out.
Fundamental analysis of Disney
The growth of the number of clients on the streaming platforms somewhat compensates for a lack of them in the amusement parks: from the end of March till the beginning of May 2020, the number of the subscribers of Disney+ online services grew from 33.5 million to 54.5 million, which was a record for the company.
It should be mentioned that the Disney platform is a serious rival to Netflix: it may not harm the latter gravely but will for sure play on the nerves. The reason for which Disney may not push Netflix out of the market is the fact that they have different subscribers.
Switching to online entertainment will help Disney cover up the significant losses that it suffers from the amusement parks and other offline entertainment facilities lying idle. During the last financial year, the income of Disney grew by 20.7% per annum. I think this is a serious promise of future success. These days, many of the company's rivals are struggling to minimize their losses, only dreaming about a profit.
Tech analysis of Disney stocks
On D1, the stocks are restoring their positions after a swift decline. They keep growing with small pullbacks inside an ascending channel and have crossed the EMA50.
Crossing the EMA50 does not mean a trend reversal: while the price is heading for the EMA200, it might be too bold to forecast a change in the trend. However, the development of an uptrend is obvious, and many financial analysts also forecast further growth. I suppose we should agree with them.
The pandemics may slow down the growth a bit, however, I still recommend buying. The aim of the growth is currently $125.00 - $127.00. The price may correct on its way, remaining inside the ascending channel borders.
Sony Corporation
Regardless of the company's specialization being the production of electronic devices and gadgets, Sony is currently a strong rival to Disney. In the sphere of technology, the competition is too tough for Sony but it is trying hard. However, it is doing much better in the sphere of entertainment.
Many people have to stay home and diversify their free time as much as they can. So, the company tries to meet the increasing demand for online entertainment alongside its rivals, providing novelties, updates, and discounts.
Sony: fundamental analysis
The company will present its next report in May; an insignificant increase is forecast, which, in turn, might influence the stock price slightly. Meanwhile, some of the company's rivals, which I have not touched upon in the article, do not make even a small profit. I think that in the current market situation even a tiny profit is a large achievement.
This shows that the company stays the course regardless of the crisis and the unweaving financial crisis. If the company's profit remains positive, Sony has all chance to fight the rivals on equal terms.
Tech analysis of Sony stocks
On D1, the quotations demonstrate positive dynamics after a drawdown. The stocks keep forming an ascending channel, though slowly.
Sony stocks are currently trading above the EMA200, which indicates a bullish trend. At the same time, the EMA50 demonstrates minor growth: this means that the two EMAs may soon cross, and the stock price will go on growing.
As long as the leading analysts forecast the growth of these stocks as well, it gives us hope. The aim of the growth is currently at the resistance level of $67.00.
On a smaller scale of D1, we may see that at the end of 2018 - the beginning of 2019, the stocks demonstrated a large correctional wave and then demonstrated serious growth, renewing the highs. Drawing a parallel, we may suppose that this scenario will repeat.
Quite soon (this year, perhaps) Sony stocks will renew the highs and go on developing the general ascending dynamics. The next long-term goal of the growth may be at $80.00.
Closing thoughts
In the sphere of entertainment, there are many companies worth attention. At the current stage, Disney and Sony are not the only ones who keep making a profit while many others are suffering losses, thus, other giants may be analyzed alike.
Perhaps, much depends on the size of the business and its ability to adapt. These are the factors that you should pay attention to looking for trading opportunities in this sector.
