Walt Disney Earnings to Swing From Year-Ago Losses

Walt Disney, a family entertainment company, is expected to report its fiscal fourth-quarter earnings of $0.44 per share, which represents year-over-year growth of over 320% from a loss of -$0.20 per share seen in the same period a year ago.

The family entertainment company would post revenue growth of 28% to $18.8 billion. The company has beaten earnings per share (EPS) estimates all times in the last four quarters, according to ZACKS Research.

As of July, Disney+ and Hotstar had more than 116 million subscribers, while Hulu and ESPN+ combined had more than 57 million subscribers. Barclays analysts cite slowing growth and the fact that Disney+ produces far less new content than Netflix, as reasons for their scepticism. Disney+ claims to have 250 million subscribers by 2024, Fobes reported

At the time of writing, Walt Disney shares, which plunged over 3% so far this year, traded 2.67% higher at $174.83 on Friday.

Analyst Comments

“We see Disney on the short list of global streaming majors. Despite significant continued upward earnings revisions, shares have lagged as net adds expectations ran ahead of content deliveries. As the content pipeline builds into ’22 and ’23, core net adds should accelerate, driving shares,” noted Benjamin Swinburne, equity analyst at Morgan Stanley.

“Disney is building content assets that enable it to take advantage of the significant direct-to-consumer streaming opportunity ahead. Disney’s underlying IP remains best-in-class, supporting long term content monetization opportunities. During this period of FCF pressure from Parks closures, ESPN’s FCF generation is key to driving down leverage. Historical cycles suggest a potential return to above prior peak US Parks revenues in FY23.”

Walt Disney Stock Price Forecast

Nineteen analysts who offered stock ratings for Walt Disney in the last three months forecast the average price in 12 months of $215.06 with a high forecast of $263.00 and a low forecast of $175.00.

The average price target represents a 22.79% change from the last price of $175.15. From those 19 analysts, 15 analysts rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $210 with a high of $250 under a bull scenario and $135 under the worst-case scenario. The firm gave an “Overweight” rating on the family entertainment company’s stock.

Several other analysts have also updated their stock outlook. Barclays slashed the target price to $175 from $210. Guggenheim cut the target price to $205 from $215. JPMorgan raised the target price to $230 from $220.

Technical analysis suggests it is good to sell now as 100-day Moving Average, and 100-200-day MACD Oscillator signals a strong selling opportunity.

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