Walt Disney Co. (NYSE: DIS) is scheduled to release its fiscal first-quarter financial results after the markets close on Tuesday. The consensus estimates call for $1.44 in earnings per share (EPS) and $20.79 billion in revenue. In the same period last year, the Mouse House reported $1.84 in EPS and $15.3 billion in revenue.
The Disney+ streaming service will be what everyone is watching for in this report. Although there are concerns about theme park attendance in the midst of the coronavirus outbreak, the Disney+ numbers will dictate the future of this company in the streaming wars.
Last week, Merrill Lynch’s Jessica Reif Ehrlich issued a Buy rating with a $168 price objective. In the note, she was incrementally more bullish on Disney’s monetization prospects beyond the legacy pay-TV model. The firm’s longer-term base-case subscriber counts are 90 million for Disney+, 50 million for Hulu and 10 million for ESPN+, which is up from 60 million, 40 million and 8 million, respectively. She noted that Netflix reached 110 million subscribers in the past five years and asked “Why not Disney?” in that same light. Her investment rationale said:
We believe Disney shares will outperform peers as a result of strong DTC subscriber growth at Disney+, Hulu and ESPN+, a solid studio outlook due to blockbuster film releases and Parks & Resorts growth, aided by new Star Wars Lands attractions and the WDW 50th Anniversary in FY22.
Wedbush’s Daniel Ives also released a report last Wednesday, pointing to a “jaw dropping 10 million subscribers” after just the first day. That is considerably higher than he and many other analysts were projecting:
This speaks to the 1-2 punch of success that Iger and Disney have coming out of the gate with unmatched content and a massive brand/distribution that makes the House of Mouse a legitimate streaming competitor on Day One to Netflix and could hit its long term sub targets by 2024 (60 to 90 million subs) potentially two years earlier at this pace in our opinion… we continue to believe that 10%+ of Netflix’s installed base could be disrupted/higher churn by these two stalwarts entering the streaming landscape. … We note Disney has roughly 7,500 TV episodes and over 500 movies including legendary franchises such as The Simpsons, Star Wars, and a myriad of Pixar, Marvel, and Disney classics that we believe makes this a legitimate streaming player right out of the gates.
Excluding Tuesday’s move, Disney stock had outperformed the broad markets with a gain of about 27% in the past 52 weeks. In just the past quarter, the share price was up 9%.
Here’s what other analysts are saying ahead of the report:
- Rosenblatt Securities has a Buy rating and a $175 price target.
- Guggenheim has a Buy rating with a $151 target price.
- Morgan Stanley has an Overweight rating with a $170 target.
- UBS Group’s Buy rating comes with a $162 target price.
- Imperial Capital has a Hold rating with a $143 price target.
Shares of Disney traded up about 2% to $143.92 on Tuesday, in a 52-week range of $107.32 to $153.41. The consensus price target is $157.76.
ALERT: Take This Retirement Quiz Now (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
