Surprising Decline in Disney Stocks: What Should Investors Do?

Walt Disney Company (NYSE:DIS) is highlighted as one of the stocks discussed by Jim Cramer in his latest program. On the day the program aired, 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 of $1.11 managed to surpass the analyst estimate of $1.05. By the end of the day, the stock's value had declined by %7.

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

Cramer also shed light on the reason for the drop: "The pricing environment for broadcasters has not been favorable for subscription growth in recent weeks, I admit. However, this is a developmental process. Perhaps people thought this process had come to an end."

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