Disney stock has scored a positive post-earnings reaction in four of its last eight reports
Apple (AAPL) is propping up the Dow to end the week after the tech titan's blowout corporate report. The next blue-chip to step into the earnings confessional will be Walt Disney Co (NYSE:DIS), set for its quarterly report before the market opens on Tuesday, May 7. Ahead of the event, options traders are betting bullishly, perhaps hoping the stock's recent post-earnings history skews to the upside.
Walt Disney stock closed higher the session after earnings in four of its last eight quarters, but finished positive after its last three, including a 11.5% pop in February. The shares averaged a 6.5% swing, regardless of direction, after their last eight earnings events. This time around, the options market is pricing in a larger post-earnings move of 7.5%.
DIS was last seen trading at $113.79, up 1% on the day. The shares are up 26% in 2024, with their 7% quarterly drawdown finding historical support at the site of that post-earnings bull gap from February. Don't expect much unwinding of pessimism from the blue-chip next week, considering there's only one "sell" rating on the stock, and a slim 1.1% of its total available float is sold short.
Echoing this, at the International Securities Exchange (ISE), Cboe Volatility Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DIS' 50-day call/put volume ratio of 2.30 sits higher than 93% of readings from the past year. But with the equity sporting a Schaeffer's Volatility Scorecard (SVS) of 16 out of 100 -- which indicates consistently realized lower volatility than its options have priced in -- a premium-selling strategy could be the move for the entertainment giant.