Shares of The Walt Disney Company (NYSE:DIS) have been struggling this year, down 11% since the beginning of the year. With the stock trading at around $131, this is the lowest that Disney has been since when it launched its streaming service, Disney+, back in November.
The company also reported its first-quarter earnings earlier this month, which were the first results to include performance of Disney+. And while the company’s revenue rose by 36% from the prior-year quarter, diluted earnings per share of $1.53 were down 17% from the $1.84 it earned a year ago.
There haven’t been any other serious developments for Disney in the past few months and the latest decline is likely to do with the general market downturn, triggered by concerns related to the coronavirus.
Disney’s operations in China are likely to impact its upcoming quarters and investors may be bracing for an underwhelming quarter.
Currently, Disney’s stock is approaching oversold territory with a Relative Strength Index (RSI) of just over 31. The last time it went oversold was back in late January when it fell to around $135. The stock would end up recovering and with Disney falling even lower this time around, it could present an even more attractive buying opportunity for investors looking to buy on the dip.
In addition to the attractive growth opportunities that the stock possesses over the long term, Disney also offers investors a dividend of 1.25%. While it’s lower than the 2% yields that investors can get with an average stock from the S&P 500, it’s a good way to pad your total returns from owning shares of the company.
