Media

What to Look for in Disney Earnings

Chris Lange

Published: August 9, 2016 9:15 am

Last Updated: January 13, 2020 4:47 am

Walt Disney Co. (NYSE: DIS) has yet to recover from last year’s market crash in August, but this earnings report could provide the vehicle to do just that. The Mouse House is scheduled to report its fiscal third-quarter financial results after the markets close on Tuesday.

The consensus estimates from Thomson Reuters are calling for $1.61 in earnings per share (EPS) on $14.15 billion in revenue. The same period from last year had $1.45 in EPS on $13.1 billion in revenue.

Its biggest movies have been major hits so far, including “Finding Dory,” which broke U.S. box office records for the most successful opening weekend ever. “Captain America: Civil War” was widely lauded, as was “Zootopia,” with another highly anticipated Marvel movie, “Doctor Strange,” set for a November release. All Disney needs is some bullish sentiment for its stock to pick up for the rest of the year on the back of its successful 2016 in movies.

In addition to opening a brand new $3 billion theme park in Shanghai China, Disney also recently announced that Netflix had reached an exclusive deal with Disney giving it streaming rights to Disney films, a win-win for both of the companies. Analysts suggest that a strong performance at its theme parks and film business should drive solid earnings growth over the next few years.

Prior to the release of the earnings report, a few analysts weighed in on Disney:

• Piper Jaffray reiterated an Overweight rating with a $120 price target.
• Deutsche Bank reiterated a Hold rating with a $115 price target.
• FBR has a Market Perform rating with a $108 price target.
• Pivotal Research reiterated a Buy rating with a $122 price target.
• Stifel has a Hold rating with a $110 price target.
• Morgan Stanley reiterated a Hold rating.
• Brean Capital has a Hold rating with a $100 price target.
• Jefferies reiterated a Hold rating.
• Needham reiterated a Hold rating.
• Barclays reiterated an Underweight rating with an $89 price target.

So far in 2016, Disney has underperformed the broad markets, with the stock down 8%. Over the past 52 weeks, the stock is down 11%.

Shares of Disney closed Monday at $95.75, with a consensus analyst price target of $109.37 and a 52-week trading range of $86.25 to $120.65. In early trading indications Tuesday, the stock was up about 0.5% at $96.20.