Disney Earnings: What to Watch For

Walt Disney Co. (NYSE: DIS) is scheduled to report its fiscal second-quarter financial results after the markets close on Tuesday. Although this quarter is not taking into account what has been the massive success of the newest Avengers movie installment, Disney’s box office has seen an incredible year so far with the release of “Black Panther,” among other movies.

Despite these incredibly successful films and excluding Tuesday’s move in the stock, Disney had underperformed the broad markets, with the stock down about 8.5% in the past 52 weeks. In just 2018 alone, the stock was down close 5%.

Back to earnings, Thomson Reuters consensus estimates are calling for $1.69 in earnings per share (EPS) on $14.08 billion in revenue. In the same period of last year, the entertainment giant said it had EPS of $1.50 and $13.34 billion in revenue.

Disney’s Avengers series has produced blockbuster after blockbuster. Now, the latest installment, “Avengers: Infinity War,” had domestic box office of $250 million its first weekend. The figure pushed Disney’s share of the U.S. box office to about 30%, double the next studio.

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Still, lurking in the background is what studios like Disney do as more and more Americans turn to streaming services like Netflix and Amazon to watch movies. While “Avengers: Infinity War” will be one of the biggest movie hits of all time, it may not be able to take the industry’s annual revenue, which has been around $11 billion for most of the past five years, any higher. Disney already has said it will start a streaming media operation of its own and pull movies it produces from Netflix’s service.

A few analysts weighed in on Disney ahead of the report:

• B. Riley has a Buy rating with a $125 price target.
• BMO Capital Markets has a Market Perform rating and a $95 target.
• Jefferies has a Hold rating with a $112 price target.
• Loop Capital has a Buy rating and a $130 price target.
• Macquarie has a Buy rating with a $125 target price.
• Pivotal Research has a Hold rating with a $93 target price.

Shares of Disney were last seen down 1.2% at $101.27 on Tuesday, with a consensus analyst price target of $119.90 and a 52-week range of $96.20 to $113.19.

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