Walt Disney's DTC Business Outshined, Analysts Expect Momentum To Continue

Core Viewpoint - Walt Disney Co reported strong quarterly results, with various analysts providing differing ratings and price targets based on the company's performance in its direct-to-consumer (DTC) and Experiences segments [1][2][4]. Group 1: Financial Performance - Walt Disney's DTC business generated EBIT that exceeded consensus by $293 million, growing by $431 million year-on-year, positioning the company to exceed its $1 billion fiscal 2025 DTC EBIT guidance [2]. - The company reported revenues of $24.7 billion, a 5% increase, and operating income of $5.1 billion, a 31% increase, with adjusted earnings of $1.76 per share, surpassing forecasts of $1.40 [6][10]. - Experiences EBIT was reported at $3.1 billion, with domestic attendance down 2% but international attendance up 4% [3]. Group 2: Analyst Ratings and Price Targets - Goldman Sachs maintained a Buy rating and raised the price target from $139 to $140 [2]. - Piper Sandler reiterated a Neutral rating with a price target of $115, noting that revenues were marginally ahead of expectations [4]. - BofA Securities reaffirmed a Buy rating and a price target of $140, citing management's increased confidence in achieving full-year targets [6][7]. - Needham maintained a Buy rating with a price target of $130, highlighting the offsetting impact of the DTC business on the softening linear TV segment [8]. Group 3: Future Projections and Guidance - The company expects a sequential decline in Disney+ subscribers in the March quarter, indicating a need for continued execution [5][12]. - Management reiterated their EPS growth guidance for the year, suggesting either conservatism or potential pressure in the second half [12]. - Walt Disney trimmed its fiscal 2025 content budget to $23 billion from $24 billion, attributing this to ongoing cost structure discipline [8].