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Disney’s disputes make streaming firms tumble

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Last Week’s Highlights

Disney falls amid dispute with Charter

The dispute between Disney and Charter Communications over distribution fees has led to the discontinuation of several channels, including ESPN and ABC, for customers of Charter’s Spectrum cable service. Disney pulled these channels in the middle of coverage of live sporting events, such as the U.S. Open and college soccer. Charter claimed it offered a fair deal, but Disney demanded an excessive increase in programming fees. The main concern centers on ESPN, which does not offer a streaming service and is essential to Charter’s video business. Both companies have expressed a willingness to negotiate, but the financial consequences could be significant for both sides, with Disney considering options such as a direct-to-consumer approach for ESPN. The situation has generated concern among fans and viewers, while other media companies have also experienced stock declines due to the dispute.

Taylor Swift makes AMC shares jump

Taylor Swift’s “Eras” tour film version is making waves, boosting AMC Entertainment’s 4.38% in Friday’s trading session. The film set a new record for AMC, generating $26 million in advance ticket sales in a single day, surpassing the previous record for “Spider-Man: No Way Home.” Due to high demand, AMC plans to add additional time slots for its October 13 premiere. In addition, the premiere of “Equalizer 3” is expected to gross close to $30 million over the weekend. Despite a consensus rating of “moderate sell” by analysts on Wall Street, AMC’s 2023 average stock price target is $21.13 per share, implying a potential upside of more than 61%.

Coming Up This Week

Lululemon raises annual forecasts… again

Lululemon Athletica reported that the third quarter got off to a solid start driven by growth in North America, prompting the yoga apparel maker to raise its annual profit and revenue guidance for the second time. Sales in North America rose 11% in the second quarter, with an increase in sportswear and accessories purchases, and the company also gained market share in the United States. Sales in China experienced a 61% increase, despite some slowdown in growth rates due to global economic uncertainty. Lululemon attributed its success to continued demand for comfortable clothing and new product introductions. The company also increased its gross margins and now forecasts higher annual revenues and profits by 2023.

Dell gains on raising full-year forecasts

Dell Technologies has raised its full-year revenue and profit projections due to the growing influence of artificial intelligence (AI) and stabilizing demand for computer hardware and servers after several months of decline. This is reflected in an 8% increase in the value of the company’s shares in extended trading. The results indicate a possible end to the decline in technology spending, aligning with other positive indicators in the sector. Dell expects demand for its PowerEdge servers and generative AI solutions with Nvidia to continue to rise, driven by AI investments from large technology companies. The revenue and profit projections beat analysts’ estimates, reflecting Dell’s strong market position compared with rival HP Inc., which has cut its forecast due to demand challenges and weakness in China.

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July 8, 2024

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