Surprising Decline in Disney Stocks: What Should Investors Do?

Walt Disney Company (NYSE:DIS) is highlighted as one of the stocks discussed in Jim Cramer's latest program. On the day of the broadcast, Walt Disney Company announced its fourth-quarter earnings report for the fiscal year. The company's revenue was reported at $22.46 billion, while analyst estimates were at $22.75 billion. However, the adjusted earnings per share came in at $1.11, surpassing the analyst estimate of $1.05. By the end of the day, the stock value showed a decline of %7.

Jim Cramer evaluated the stock's decline during his morning program, stating: "This is an overreaction to the earnings and stock price movements. They gave you a dividend increase, there's a buyback; this is an extreme reaction... If they can regain their current positions, I think that will change people's perception. They should accelerate stock buybacks; that would be great. This is a buyback like what DuPont did. But the problem is Disney hasn’t been able to deliver the expected things yet. This big drop in Disney is really shocking, it dropped $10. I was unhappy when I reviewed everything, but a $10 drop is an insecure overreaction. The company is generating significant cash flow, doing a large buyback, and giving a bigger dividend. This is clearly an extreme situation."

Cramer also shed light on the reason for this decline: "The pricing environment for broadcasters in recent weeks does not provide a favorable outlook for subscription growth, I admit that. However, this is a development process. Perhaps people thought this process had come to an end."

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