The upcoming report from Walt Disney (DIS) is expected to reveal quarterly earnings of $1.45 per share, indicating an increase of 18.9% compared to the year-ago period. Analysts forecast revenues of $24.7 billion, representing an increase of 4.9% year over year.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Before a company reveals its earnings, it is ...

Core Viewpoint - Walt Disney is transitioning its focus towards its direct-to-consumer (DTC) streaming segment, which is becoming increasingly important for its revenue generation after previously incurring significant losses [1][2]. DTC Segment Performance - The DTC segment has recently started generating positive operating income, marking a critical milestone for the company [2]. - Disney reported 157 million global monthly active ad-supported users across its DTC platforms, including Disney+, Hulu, and ESPN+, with 112 million users in the U.S. and Canada [3]. - The metric reflects users rather than accounts, indicating approximately 60 million ad-supported accounts, which is less than 31% of total DTC subscribers as of September 28, 2024 [4]. Subscriber Trends - CEO Bob Iger noted that 60% of new subscribers in the U.S. are opting for ad-supported plans, highlighting a shift in consumer preference [4]. - This trend aligns with Netflix's experience, which reported a 30% increase in ad-tier signups quarter over quarter and a doubling of ad revenue in 2024 [5]. Monetization Strategies - Disney is monetizing its DTC segment through subscription fees and advertising sales, with the latter expected to be a significant driver of financial performance [7]. - The basic ad-supported tier of Disney+ costs $9.99 per month, which is lower than the ad-free option, and pricing changes are aimed at encouraging more users to choose ad-supported plans [8]. Valuable Intellectual Property - Disney's extensive intellectual property portfolio includes blockbuster movies, classic franchises, and popular series, which drive viewer interest and engagement [9]. - The company also holds sports broadcasting rights, with plans to launch a standalone ESPN streaming service, further enhancing customer growth potential [9]. Competitive Advantage - Disney's proprietary ad tech stack allows for effective ad delivery to consumers, providing a competitive advantage in the streaming market [11]. - The success of Disney's streaming services, particularly in advertising, is a key reason for potential investment in the stock [11].

Core Viewpoint - Walt Disney's stock performance has shown a slight decline recently, but it has outperformed the Consumer Discretionary sector and the S&P 500 over the past month, indicating a mixed but generally positive outlook for the company ahead of its upcoming earnings report [1][2]. Financial Performance - The upcoming earnings report for Walt Disney is scheduled for February 5, 2025, with projected EPS of $1.45, reflecting an 18.85% increase year-over-year. Quarterly revenue is expected to be $24.7 billion, up 4.87% from the previous year [2]. - Full-year Zacks Consensus Estimates predict earnings of $5.41 per share and revenue of $94.94 billion, representing year-over-year increases of 8.85% and 3.91%, respectively [3]. Analyst Sentiment - Recent revisions to analyst forecasts for Walt Disney are crucial as they indicate short-term business trends. Positive estimate revisions are seen as a sign of optimism regarding the company's outlook [4]. - The Zacks Rank system, which assesses estimate changes, currently ranks Walt Disney at 3 (Hold), with no changes in the EPS estimate over the past month [6]. Valuation Metrics - Walt Disney is trading at a Forward P/E ratio of 20.94, which is below the industry average of 22.08, suggesting that the stock is undervalued compared to its peers [7]. - The company has a PEG ratio of 2.03, which is lower than the industry average of 2.49, indicating a more favorable valuation in terms of projected earnings growth [8]. Industry Context - The Media Conglomerates industry, to which Walt Disney belongs, ranks in the bottom 28% of all industries, according to the Zacks Industry Rank, which assesses the performance of industry groups [8][9].

Company Valuation and Performance - The Walt Disney Co (DIS) was previously considered to be up to 55% undervalued in October [1] - Since October, the company's shares have increased by approximately 20% [1] - There is still potential upside for the company's valuation [1] Analyst Background and Methodology - The analysis is conducted by an individual with over 15 years of market experience in stocks, FX, crypto, and commodities [1] - The analyst holds a master's degree in finance and combines microeconomic studies of company financials with a macroeconomic perspective [1] Analyst Position and Disclosure - The analyst holds a beneficial long position in DIS through stock ownership, options, or other derivatives [2] - The analysis represents the analyst's own opinions and is not influenced by compensation or business relationships with mentioned companies [2]

Group 1 - Disney's stock investors are seeking clarity on the rationale behind its streaming TV deal with Fubo [1] - The stock prices referenced were from the afternoon of January 23, 2025, indicating a specific timeframe for the analysis [1] - The video discussing this deal was published on January 25, 2025, suggesting a timely examination of the market reaction [1]

Core Viewpoint - Walt Disney is poised to outperform the market in 2025 after a strong performance in 2024, where shares rose 24%, aligning with the S&P 500 [1][4]. Group 1: Recent Performance and Growth - Disney's recent successes include the release of the three highest-grossing movies of 2024 and a profitable Disney+ streaming segment, which had previously incurred billions in losses [3]. - The company's market cap has surpassed $200 billion, reflecting a turnaround since Bob Iger's return as CEO, although revenue growth has been modest, remaining in the single digits for four of the last five fiscal years [4]. - In fiscal 2024, Disney exceeded Wall Street profit targets for all four quarters, with net income growing significantly faster than revenue, which increased by only 3% [5]. Group 2: Future Outlook and Strategies - Analysts project a modest 4% revenue growth for fiscal 2025, while Disney's guidance anticipates adjusted net income to rise in the high single digits [6]. - The company is focusing on long-term growth through expansion projects at domestic theme parks and scalability for Disney+ [7]. - Disney plans to add another cruise ship to its fleet and has made significant announcements regarding its premium cruise line, which is crucial for future growth [8]. Group 3: Upcoming Releases and Market Position - In 2025, Disney will release new installments in popular franchises, including Captain America and Avatar: Fire and Ash, which is expected to be a major box office success [9]. - Disney's stock is currently trading at a reasonable 20 times this year's adjusted earnings estimate, with expectations of a return to double-digit bottom-line growth in fiscal 2026 and 2027 [10]. - As valuations for many tech leaders are extended, Disney is emerging as a compelling flight-to-safety investment for 2025 [11].

Executive Compensation - Disney CEO Bob Iger's total pay package increased to $41 1 million in fiscal 2024, up 30% from $31 6 million in the previous year [1] - Hugh Johnston, Disney's CFO since December 2023, made $24 5 million last year [2] - Horacio Guttierez, Disney's Senior EVP and Chief Legal and Compliance Officer, earned $15 8 million, up from $11 6 million in fiscal 2023 [2] Succession Planning - Disney is preparing for CEO succession ahead of Bob Iger's contract expiration on December 31, 2026 [1] - The successor will be selected by early 2026 from a pool of four internal candidates and outsiders [1] Shareholder Meeting - Disney's annual shareholder meeting will be held virtually on March 20 [3] - Last year's meeting saw challenges from activist shareholders, including Nelson Peltz, who raised concerns about film studio dysfunction and excess costs [3] - This year's meeting is expected to be less contentious, with the company urging "no" votes on three shareholder proposals related to climate-related investments, participation in the Human Rights Campaign's Corporate Equality Index, and ad spending on platforms with disfavored political and religious viewpoints [4]

Group 1 - Disney stock experienced a significant recovery in the latter half of 2024, rising from a low of $85.60 to $111.35, resulting in a 24.5% gain, which underperformed the S&P 500's 25% return [1] - The primary catalyst for this rebound was Disney's Q4 and full-year 2024 earnings report, which exceeded market expectations for both earnings and revenue [2] - As of January 23, 2025, Disney stock price decreased to $108.86, reflecting a 2.26% decline since the start of the year [2] Group 2 - Wall Street analysts are becoming increasingly optimistic about Disney, with Citigroup's Jason Bazinet setting a price target of $125, indicating a 15% upside [3][4] - Citi anticipates an 8% growth in EPS for 2025, followed by 11% and 13% growth in 2026 and 2027, respectively, based on strategic mergers and product launches [5] - Citi's EPS estimates for 2025 and 2026 are below market expectations, with a bear case scenario suggesting a downside to $96, while a bull case could see the stock rise to $134 [6][7] Group 3 - Bazinet resumed coverage on Disney with a conservative price target of $125 and a 'Buy' rating, advising investors to monitor the upcoming earnings call on February 5 [8]

Stock Performance - Disney stock gained 24.5% in 2023, slightly underperforming the S&P 500's 25% gain [1] Streaming Business - Disney's streaming platforms (Disney+, Hulu, ESPN+) are now profitable, with entertainment streaming reporting $253 million operating income in Q4 2024, up from a $420 million loss last year [3][4] - Total streaming operating income reached $321 million in Q4 2024 [4] - Disney ended Q4 2024 with 174 million total streaming subscriptions, including 120 million core Disney+ subscriptions, a 4.4 million increase from last year [5] - Management expects an $875 million increase in entertainment streaming operating income in 2025 [5] Content Pipeline - Disney had the top 3 grossing films worldwide in 2024: Inside Out 2, Deadpool & Wolverine, and Moana 2 [7] - The company has 10 films slated for release in 2025, mostly sequels or based on previous content, including Avatar: Fire and Ash and live-action Snow White [8] - Disney's content strategy focuses on creating franchises that can be monetized across multiple platforms, including theaters, streaming, parks, and merchandise [9] Parks and Experiences - Parks and experiences segment saw a 1% sales increase but a 6% operating income decrease in Q4 2024 [12] - Management expects improvement as the American consumer strengthens and new attractions are introduced [12] - Disney's parks are considered unparalleled assets that differentiate the company in the entertainment industry [10][11] Financial Outlook - Earnings per share (EPS) increased from $1.29 to $2.72 for the year, with management guiding for a low increase in adjusted EPS for 2025 [5] - The company recently reinstated its dividend [13]

Stock Performance - Walt Disney (DIS) closed at $108 81, marking a +0 1% move from the prior day, lagging the S&P 500's daily gain of 0 61% [1] - Over the past month, shares of the company lost 3 43%, underperforming the Consumer Discretionary sector's loss of 1 39% and the S&P 500's gain of 2 08% [1] Earnings and Revenue Projections - The company is predicted to post an EPS of $1 45 for the upcoming quarter, indicating an 18 85% growth compared to the same quarter last year [2] - Revenue for the upcoming quarter is projected at $24 7 billion, reflecting a 4 87% rise year-over-year [2] - Full-year Zacks Consensus Estimates predict earnings of $5 41 per share and revenue of $94 94 billion, representing year-over-year changes of +8 85% and +3 91%, respectively [3] Analyst Estimates and Zacks Rank - Recent revisions to analyst estimates reflect the latest near-term business trends, with upbeat changes indicating a favorable outlook on the company's business health and profitability [3] - Walt Disney currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining steady over the past month [5] Valuation Metrics - Walt Disney has a Forward P/E ratio of 20 08, indicating a discount compared to its industry's Forward P/E of 21 51 [6] - The company's PEG ratio is 1 94, lower than the Media Conglomerates industry average of 2 43 [6] Industry Overview - The Media Conglomerates industry, part of the Consumer Discretionary sector, has a Zacks Industry Rank of 169, placing it in the bottom 33% of all industries [7] - The top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]