Disney's Q4 Earnings Coming Up: Time to Buy, Sell or Hold the Stock?

Core Insights - The Walt Disney Company is set to report its fourth-quarter fiscal 2025 results on November 13, with expected revenues of $22.88 billion, reflecting a modest growth of 1.37% year-over-year, while earnings per share are projected to decline by 9.65% to $1.03 [1][5][19] Financial Performance - The consensus estimate for earnings per share has remained steady at $1.03 over the past 30 days, with a historical earnings surprise of 10.27% in the last reported quarter [2][4] - The company has consistently beaten earnings estimates in the past four quarters, with an average surprise of 14.99% [2] Segment Performance - The Experiences segment is projected to generate revenues of $8.46 billion, indicating a marginal growth of 2.7% year-over-year, despite facing operational pressures due to reduced crowd levels at theme parks [10][11] - The Entertainment segment is expected to achieve revenues of $11.01 billion, reflecting a 1.7% increase year-over-year, with a target of $1.3 billion in Direct-to-Consumer operating income [6][3] Strategic Initiatives - Disney anticipates a significant increase in Disney+ and Hulu subscriptions, with a projected growth of over 10 million subscribers compared to the fiscal third quarter, driven by an expanded distribution deal [7][12] - The company plans to fully integrate Hulu into Disney+ by 2026, following the acquisition of Comcast's stake [12] Market Position and Valuation - Disney shares have declined by 0.5% year-to-date, underperforming the Zacks Consumer Discretionary sector, which has grown by 1.8% [13][14] - The company trades at a forward P/E of approximately 16.86x, below the industry average of 19.13x, despite achieving streaming profitability [16][19] Investment Considerations - The upcoming results present a mixed investment opportunity, with streaming growth potential contrasted by challenges in the Experiences segment, including reduced attendance and promotional discounting [19][21] - Investors are advised to maintain existing positions while awaiting clearer signals from the fourth-quarter results, as uncertainties remain regarding parks attendance recovery and ESPN streaming adoption [21]