Stock Markets Analysis and Opinion

Disney Earnings Preview: High Stakes Following Stock’s Positive Start to 2024

2024.02.07 09:41

  • Walt Disney will publish its quarterly outcomes on Wednesday, February 7, after the US inventory market closes.
  • Results from Disney+ and different streaming companies will likely be carefully watched.
  • This will likely be a key take a look at for the bulls because the inventory outperformed in January.
  • In 2024, make investments like the massive funds from the consolation of your private home with our AI-powered ProPicks inventory choice device. Learn extra right here>>

Walt Disney (NYSE:) is poised to report modest year-over-year (YOY) features in each income and web earnings because it unveils its first-quarter fiscal 2024 earnings outcomes after at present’s market shut.

This extremely anticipated report follows the inventory’s current surge to an 8-month excessive of $97.93, with a achieve of over 7% for the reason that starting of the 12 months.

Notably, Walt Disney shares, which have lagged behind the for the previous three years, have now greater than doubled the index’s features in January alone. Against this backdrop, at present’s report will likely be pivotal in figuring out whether or not this outperformance will proceed or if a correction is imminent.

In this text, we’ll delve into the consensus forecasts for at present’s outcomes, highlighting key particulars to look ahead to.

Additionally, we’ll analyze the inventory’s profile utilizing ProSuggestions, and conclude by analyzing the projected targets for the inventory primarily based on insights from analysts and InvestingPro fashions.

What are the consensus forecasts for Disney’s outcomes?

Analysts expect EPS of $1.04, nearly 27% larger than within the earlier quarter, however up by solely 5% year-on-year.

Upcoming Earnings

Upcoming Earnings

Source: InvestingPro

Sales are forecast at $23.79 billion, up 12% on the earlier quarter, however up a really modest 1.2% on the identical quarter final 12 months.

However, additionally it is necessary to level out that Walt Disney has exceeded earnings expectations for the final two consecutive quarters, notably beating forecasts by greater than 15% within the earlier quarter.

Previous Earnings

Previous Earnings

Source: InvestingPro

Interestingly, gross sales have disillusioned over the past two quarters, however this has not prevented the inventory from reacting positively, as InvestingPro knowledge exhibits.

Forecast Vs. Actual Earnings

Forecast Vs. Actual Earnings

Source: InvestingPro

Stock Price Reaction After Earnings

Stock Price Reaction After Earnings

Source: InvestingPro

Conversely, within the quarter previous these 2 quarters of EPS overshooting, Disney had very barely missed EPS expectations, whereas exceeding earnings forecasts, which nonetheless despatched the share plunging.

This means that the inventory is much extra delicate to EPS knowledge than to earnings knowledge, and we’ll want to hold this in thoughts if we’re to react properly to at present’s launch.

To be watched carefully

Beyond these essential figures, buyers focused on Walt Disney shares can have a number of particulars to hold a detailed eye on.

While the corporate is shifting away from conventional cable companies, which has weighed on a few of Disney’s historic segments, the corporate has made massive strides in streaming, with Disney+, ESPN+, and Hulu.

Thus, subscriber development for these companies is a key metric for judging the corporate’s prospects. Revenues on this phase are anticipated to attain $5.45 billion, a brand new file, and up 13% year-on-year.

On one other word, we’ll even be maintaining a tally of any potential updates concerning the battle between the corporate and activist investor Nelson Peltz, CEO and founding father of Trian Partners.

Peltz has proposed new candidates for Disney’s board of administrators and has continued to push for adjustments throughout the firm as a significant shareholder.

Walt Disney profile replace with InvestingPro ProSuggestions

When it comes to Walt Disney’s profile, the ProSuggestions reveal extra strengths than weaknesses.

ProTips Disney

ProSuggestions Disney

Source: InvestingPro

Notably, web earnings is predicted to rise this 12 months, though anticipated development is under the peer common.

ProTips Disney

ProSuggestions Disney

Source: InvestingPro

Moreover, the corporate has been worthwhile over the previous 12 months, and analysts count on this to stay the case this 12 months.

ProTips Disney

ProSuggestions Disney

Source: InvestingPro

On the unfavorable aspect, InvestingPro ProSuggestions word that the inventory is buying and selling on excessive earnings multiples.

ProTips Disney

ProSuggestions Disney

Source: InvestingPro

What do analysts and fashions predict for Walt Disney shares?

Finally, it is also price taking inventory of what analysts are forecasting for the inventory, and what valuation fashions can inform us.

As far as fashions are involved, the InvestingPro Fair Value for Walt Disney shares, which synthesizes 13 acknowledged monetary fashions, stands at $115.85, i.e. nearly 20% above Monday’s closing worth.

Fair Value

Fair Value

Source: InvestingPro

Analysts, alternatively, are barely much less optimistic, anticipating an increase within the share worth to $102.50 inside 12 months, or simply over 6% above the present worth.

Conclusion

While the Walt Disney share has outperformed the S&P 500 for the reason that begin of the 12 months, at present night’s outcomes will likely be a key take a look at of the share’s short-term route.

The firm’s current development of surpassing EPS expectations does not remove the opportunity of optimistic information that would considerably enhance the inventory, particularly contemplating the historic knowledge out there on InvestingPro.

***

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Disclaimer: This article is written for informational functions solely; it doesn’t represent a solicitation, provide, recommendation, counseling or advice to make investments as such it’s not meant to incentivize the acquisition of property in any approach. As a reminder, any sort of asset is evaluated from a number of views and is very dangerous, and subsequently, any funding determination and the related danger stays with the investor.

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