Disney tops earnings forecast, shares soar in extended trading

Disney tops earnings forecast, shares soar in extended trading

Disney said it cut $500 million in costs across its business during the quarter, and that it remains on track to meet or exceed $7.5 billion in savings by the end of the current fiscal year. The company posted earnings of $1.22 per share, excluding certain items, ahead of analysts’ consensus forecast of 99 cents per share for October through December. As noted above, Disney was one of the best stocks in the world over the three decades between 1990 and 2020. While it’s true that you can manipulate historical returns by fussing with their beginning and end points, Disney’s record vs the broader market over pretty much any standardized period you care to measure is poor.

The unit reported revenue of $9.1 billion and operating income of $3.1 billion. The Entertainment unit’s streaming business, which also includes Hulu and Disney+ Hotstar in India, reported revenue of $5.5 billion, just above forecasts, and marking a 15% improvement from a https://g-markets.net/ year ago. Disney has mastered the process of monetizing its world-renowned characters and franchises. The company has moved beyond the historical view of a brand that children recognize and parents trust by acquiring and creating new franchises and intellectual property.

1. Following a strong bounce back of 73% in 2022, we expect more normalized growth of 5% over the next five years.
2. The Entertainment unit’s streaming business, which also includes Hulu and Disney+ Hotstar in India, reported revenue of $5.5 billion, just above forecasts, and marking a 15% improvement from a year ago.
3. MA (0.62%) and Charles Schwab Investment Management Inc. (0.54%).
4. 22 Wall Street equities research analysts have issued “buy,” “hold,” and “sell” ratings for Walt Disney in the last year.

As an offset to grand streaming plans, the results in Disney’s linear and licensing businesses were lukewarm to poor. We believe the quarter validates the strength of Disney’s assets and the firm’s ability to survive the evolution of the media industry. We’re maintaining our $115 fair value estimate and now believe the stock is only modestly undervalued.

The company was founded in 1923 as the Disney Brothers Studio and operated under several other names before being branded as The Walt Disney Company in 1986. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. Even if successful, newer revenue sources like direct-to-consumer streaming will never equal the profitability Disney once enjoyed. No peer can match the depth of Disney’s iconic characters, franchises, or content library, which will keep the firm’s streaming services in high demand and give the firm a leg up in creating new movies and television shows.

DIS price to earnings (PE)

They raised the prices on the theme parks too high. As disappointing as Disney stock has been for buy-and-hold investors, analysts like its chances of beating the market over the next 12 to 18 months. Of the 33 analysts issuing opinions on DIS stock surveyed by S&P Global Market Intelligence, 21 rate it at Strong Buy, four say Buy, six have it at Hold and two call it a Strong Sell. That works out to a consensus recommendation of Buy, with high conviction. For its entire history as a publicly traded company, Disney stock generated a total return (price change plus dividends) of 8.2% annualized.

However from that point Disney, like many Dow 30 members, was part of a huge run up over the next 3 years. Disney stock price broke $50 in 2013, the stock price hit $75 a year later and then finally smashed the $100 ceiling in 2015. Disney’s stock price dropped nearly 70% of its price value in the near 2 year period between late 2000 and late summer 2002.

That trails the S&P 500’s annualized total return of 9.8% over the same time span. DIS stock also lags the performance of the broader market over the past 20-, 15-, 10-, five-, three- and one-year periods. Shareholders in Walt Disney (DIS) probably wish they were celebrating the media and entertainment conglomerate’s 100th anniversary under happier circumstances. Although Wall Street continues to be bullish on the name, the past couple of years have been brutally tough on this bluest of blue chip stocks. Walt Disney announced a semi-annual dividend on Wednesday, February 7th. Shareholders of record on Monday, July 8th will be paid a dividend of $0.45 per share on Thursday, July 25th.

Walt Disney Co.’s stock has languished in recent years, but now the company is acting with “urgency” to tackle a critical goal. Disney’s results could suffer if it cannot adapt to the changing media landscape. Basic pay TV service rates have continued to increase, which could cause consumers to cancel subscriptions or reduce their level of service.

Why is Walt Disney Co. stock dropping?

Ex-CEO Iger returned and shares bounced for a while, but Disney’s problems are too deep to fix overnight. They will have so much cash that Iger can buy Hulu without straining cash flow. But it was a mistake to believe in this when shares were in the $180s. Disney reaffirmed guidance that its streaming business would reach profitability by September. It reduced streaming operating losses to $138 million in the quarter, a dramatic improvement over a year ago, when it lost nearly $1 billion. The average monthly revenue per Disney+ user, outside of India, rose 14 cents.

Walt Disney Past Events

Believes company will be able to reduce spending, and turn around business. In August 2011 Disney saw it’s stock price drop nearly 14% in one day after a number of multiple analysts downgraded it. A month later, Disney stock price dropped below $30, which was a year to date low.

Walt Disney Company (DIS)

He still expects CEO Bob Iger will get it right, like cutting content (only 1 Marvel film will be released in 2024). Even before the company’s investor call, CEO Bob Iger announced in a CNBC interview that the company would take a $1.5 billion stake in Epic and work with the company to create a “huge Disney universe.” He’s also written for Esquire magazine’s Dubious Achievements Awards. Indeed, DIS stock has lost 60% of its value since its peak, shedding roughly $220 billion in market cap in the process.

The company’s Experiences unit, which includes its theme parks and consumer products, posted record revenue, operating income and operating margins. Everyone remembers how the pandemic clobbered Disney, whose theme parks and film businesses were especially exposed to COVID-19. Dividend investors certainly recall that the company suspended its payout in the early months of the outbreak in order to conserve cash, and that the dividend remains on hiatus to this day. The company is based in Walt Disney Studios, Burbank, California, and is best known for its work in animation and for creating the character Mickey Mouse. Over the years, the company expanded into live-action movies, theme parks, and even new corporate divisions such as Pixar, Marvel, and Lucasfilm. The new divisions provided new avenues for growth that helped accelerate the company’s business to a record high revenue near $85 billion in F2022.

After Earnings, Is Disney Stock a Buy, a Sell, or Fairly Valued?

The Walt Disney Company is a mass media and entertainment conglomerate known for its film studio, Walt Disney Studios. Disney owns and operates the ABC broadcast network, cable television networks, publishing, merchandising, music, and theater divisions, as well as direct-to-consumer streaming services such as Disney+, Star+, ESPN+, and Hulu. Disney was founded in 1923 and is headquartered in Burbank, CA. The company’s engulfing candle strategy studios produce major motion pictures and content for its channels and digital streaming services under the Walt Disney Pictures, Twentieth Century Studios, Marvel, Lucasfilm, Pixar, and Searchlight Pictures banners. This segment also hosts streaming services including but not limited to Disney+, ESPN+, Hulu, and Star+ as well as post-production services by Industrial Light & Magic and Skywalker Sound.

The rise of streaming, cord cutting and other industry changes over the past couple of years have Disney facing existential questions. If CEO Bob Iger’s first tenure with the company was all about acquiring assets and making Disney bigger, his sequel run as top exec is all about making Disney smaller. Selling the ABC network – and figuring out what to do with ESPN and Hulu – are just two of Iger’s more pressing “strategic initiatives.”