As a binary options trader, your job is to predict when major movements in the market are going to happen and when they will take place. That's why I love earnings season. The reality is that earnings is just about always a catalyst. Strong earnings lead to strong gains and weak earnings lead to declines. So, no matter how earnings go, profitable opportunities start to arise. With that said, one of the strongest performance companies whose stock is listed on the Dow Jones Industrial Average, Disney, is set to release its earnings report tomorrow before the bell. Today, we'll look at Disney's earnings history as well as how analysts feel about the stock in order to predict what we can expect to see from the report and resulting market movement.
Disney Earnings History
One of the first key factors any stock market analysts learns is that history has a tenancy to repeat itself. Therefore, if you're looking to predict how earnings are going to go this quarter for any company, you'll want to look into the company's earnings history as one of your first steps. With that said, Disney has an incredible history of producing earnings that far exceed the expectations of analysts. As a matter of fact, according to StreetInsider.com, for the past 7 consecutive quarters, Disney has surpassed earnings expectations with 5 out of the last 7 quarters showing positive earnings surprises of more than $0.10 ahead of expectations. So, if the old premise that history repeats itself proves to be true, we can expect to see great things out of Disney this quarter.
What Analysts Are Expecting To See
Considering Disney's strong history, analysts are expecting to see yet another strong earnings report. In terms of earnings per share, the average among analysts expectations according to NASDAQ is $5.00 with highs at $5.12 and lows at $4.50. These expectations insinuate massive growth when compared to the previous quarter as well as the same quarter last year; $1.23 and $0.77 respectively. As a matter of fact, analysts are calling for the largest earnings per share Disney has ever posted.
What I'm Expecting To See
As with analysts and most investors, I'm expecting to see overwhelmingly positive news. The reality is that Disney has a proven track record of producing strong earnings quarter after quarter, year after year. While economic conditions around the world may be a concern, the company has diversified their revenue streams with theme parks, movies, cable channels, animation, and far more. Therefore, I don't think that the economic troubles around the world are going to be an issue at this point. If the report is as expected, we can to see massive growth in the value of the stock. However, if estimations are missed, the exact opposite is true.
How Binary Options Traders Can Profit From The Trends
As you know, profit from binary options traders involves following the trends. With that said, in the likely chance that Disney beats or meets analyst expectations with regard to earnings, the price will climb. Therefore, you'll have the ability to profit from call options as it moves up. Adversely, in the highly unlikely case that Disney does disappoint, you'll want to trade put options for the best opportunity to realize a profit.
What Are Your Thoughts
What are you expecting to see from DIS? Let us know in the comments below!