Why Disney Stock Is Up By 5% Today

Disney Stock Rallies As Parks Rebound

Shares of Disney gained solid upside momentum after the company released its quarterly report. Disney reported revenue of $21.82 billion and adjusted earnings of $1.06 per share, beating analyst estimates on both earnings and revenue.

The company managed to exceed analyst estimates thanks to the strong performance of Disney’s Parks, Experiences and Products division. According to Disney, domestic parks are “generally operating without significant mandatory COVID-19-related restrictions”, while the international segment is still facing restrictions in some locations.

Disney+ subscriber growth also exceeded analyst expectations. The company managed to add 11.8 million subscribers to reach a total of 129.8 million.

What’s Next For Disney Stock?

Disney exceeded analyst expectations in the two key segments, which provided material support for its stock. The robust rebound of the domestic parks segment indicates that a similar rebound should be expected in the international segment when the pandemic-related restrictions are lifted.

Meanwhile, the continuation of growth for Disney+ serves as an additional bullish catalyst. The recent Netflix results raised worries about the future performance of all streaming services, but Disney+ managed to grow at a healthy pace.

Currently, analysts expect that Disney will report earnings of $3.77 per share in fiscal 2022 and $4.93 per share in fiscal 2023, so the stock is trading at 31 forward P/E for 2023. This is not cheap, but the market looks ready to focus on future profits. In addition, analyst estimates will likely move higher in the upcoming weeks, providing additional support to Disney stock.

It remains to be seen whether the recent inflation data will put any material pressure on Disney stock as the company should have the ability to increase prices if necessary due to the strong demand for its products.

At this point, it looks that the stock would have an opportunity to gain additional upside momentum in the upcoming trading sessions in case S&P 500 does not suffer from a major pullback after inflation reports.

For a look at all of today’s economic events, check out our economic calendar.