Walt Disney (DIS) earnings: solid growth, amid Fox assets acquisition

6:57 am ET, 03 Aug 2018

Walt Disney Company (The) (DIS) is expected to report earnings on August 7 after market close. The report will be for the fiscal quarter ending June 2018. Shares are trading at 112.63, up 0.01%.

What are DIS earnings expectations?  What news should investors be paying attention to? 

Walt Disney is a media conglomerate, comprising two distinct businesses: media networks, which include ESPN and ABC, and Disney-branded businesses, including parks, filmed entertainment, and consumer products.

The crown jewel of Disney's media networks segment is ESPN. It dominates domestic sports television with its 24-hour programming on ESPN, ESPN2, and its growing sister networks. ESPN has exclusive rights with NFL and college football, and profits from the highest affiliate fees per subscriber of any cable channel.  It generates revenue from advertisers interested in reaching adult males ages 18-49, a key advertising demographic that watches less scripted television than other groups. 

The Disney Channel benefits from attractive economics, as its programming consists of internally generated hits with Disney's vast library of feature films and animated characters. 

Walt Disney relies on the world-class Disney brand, sought after by children and trusted by parents. Over the past decade, Disney has demonstrated its ability to monetize its characters and franchises across multiple platforms--movies, home video, merchandising, theme parks, and even musicals. The stable of animated franchises will continue to grow as more popular movies get released by the animated studio and Pixar, which has already generated hits such as Toy Story, Cars, and most recently Frozen. 

On July 19, Comcast announced that it is ending its pursuit of Twenty-First Century Fox assets to focus on acquiring Sky. The capitulation cleared the way for Walt Disney to acquire the Fox assets.  The shareholders approved the $71 billion deal between the two companies, clearing another hurdle for a deal that will rattle the media and entertainment landscape and could inspire a wave of similar tie-ups.

Walt Disney Co. has a mixed history of beating analysts’ earnings estimates.  In the past four quarters, the company: 

  • Beat analyst EPS estimates by 5 cents ($1.58 actuals vs. $1.53 forecast) in FQ3’17;
  • Missed analyst EPS estimates by 5 cents ($1.07 actuals vs. $1.12 forecast) in FQ4’17;
  • Beat analyst EPS estimates by 28 cents ($1.89 actuals vs. $1.61 forecast) in FQ1’18;
  • Beat analyst EPS estimates by 16 cents ($1.84 actuals vs. $1.68 forecast) in FQ2’18.

For FQ3’18, EPS is expected to grow by 25% year-over-year to $1.97, while revenue is expected to grow 9% year-over-year to $15.49 billion.  

Over the last month, Walt Disney (DIS) returned +7.46%.Walt Disney (DIS) forward P/E ratio is 14.45, and it’s high compared to its industry peers’ P/E ratios.

Walt Disney (DIS) average analyst price target ($120.88) is 7.32% above its current price ($112.63).

For the latest price and information on Walt Disney Company (The), please visit Finstead and search for "DIS price" or "DIS news".

Walt Disney Company (The) (DIS) Stock Guide

Updated at: 4:33 pm ET, 17 Sep 2020

Before we start: if you're looking for DIS stock price, you can quickly find it out by visiting Finny and typing "DIS quote". If you're looking for a quick scoop on DIS stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "DIS". You'll get all this info in one place. Or you can just type "DIS news" to get the latest stock news.

Looking to buy or sell Walt Disney Company (The) (DIS)? Interested in getting the full scoop on DIS, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this DIS stock guide, we'll address key questions about DIS, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are DIS earnings?
2. What is DIS stock forecast (i.e., prediction)?
3. DIS buy or sell? What is DIS Finny Score?
4. What are the reasons to buy DIS? Why should I buy DIS stock?
5. What are the reasons to sell DIS? Why should I sell DIS stock?
6. What are DIS key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are DIS earnings?

DIS trailing 12-month earnings per share (EPS) is -$0.61.

Analyst Predictions

2. What is DIS stock forecast (i.e., prediction)?

Based on DIS analyst price targets, DIS stock forecast is $133.39 (for a year from now). That means the average analyst price target for DIS stock is $133.39. The prediction is based on 30 analyst estimates.

The low price target for DIS is $103.00, while the high price target is $150.00.

DIS analyst rating is Buy.

Analysis

3. DIS buy or sell? What is DIS Finny Score?

#{finnyScore:33}Our quantitative analysis shows 3 reasons to buy and 6 reasons to sell DIS, resulting in Finny Score of 33.

4. What are the reasons to buy DIS? Why should I buy DIS stock?

Here are the reasons to buy DIS stock:

  • The parks and resorts segment has rebounded strongly from the recession, and the opening of Disneyland Shanghai should provide additional momentum.
  • The addition of the Star Wars franchise broadens the demographics that the company can address. Additionally, the strong distribution and merchandising capabilities of Disney should help to speed the monetization of the Lucasfilm acquisition.
  • Although making movies is a hit-or-miss business, Disney's large library of content with popular franchises and characters reduces this volatility over time.
  • The company delivered positive earnings surprise in first-quarter fiscal 2018 after missing the estimate in the preceding quarter. However, the big take away from the quarter was better-than-expected top-line performance.
  • Disney is acquiring majority of Twenty- First Century Fox’s assets, which includes its Film and Television studios accompanied by cable and international TV businesses in a transaction worth $52.4 billion. The accord would give the company a hold on Twenty- First Century Fox's film production business like Twentieth Century Fox, Fox Searchlight Pictures as well as Fox 2000 and its storied television units Twentieth Century Fox Television, FX Productions and Fox21. It would also give control over FX Networks, National Geographic Partners, Fox Sports Regional Networks (excluding flagship broadcast network, Fox News and the cable sports networks FS1 and FS2), Fox Networks Group International, Star India along with Fox’s stake in Hulu, Sky plc, Tata Sky as well as Endemol Shine Group.
  • Disney plans to launch its own streaming services, one for Disney and Pixar brands and another for ESPN followers. The company had earlier stated that it will terminate distribution agreement with Netflix for subscription streaming of the new movies, effective 2019. The company stated the streaming services for ESPN will be launched this spring.
  • Parks & Resorts division once again turned out to be the savior for Disney. In first-quarter fiscal 2018, the company reported revenues growth of 13%, following an increase of 6%, 12%, 9% and 6% in the fourth, third, second and first quarter, respectively. The segment’s operating income climbed 21% to $1,347 million, backed by growth at the company’s domestic parks and resorts, cruise line and vacation club businesses.
  • Most media companies are failing to cope with cord cutting as consumers are unwilling to pay for large bundles of channels. Disney is making full efforts to bring back ESPN’s golden days. In an effort to attract online viewers, the company has completed the acquisition of video streaming, data analytics as well as commerce management company BAMTech in September.
  • DIS profitability is improving. The YoY profit margin change was 4.91 percentage points. See DIS profitability chart.
  • DIS average analyst rating is Buy. See DIS analyst rating chart.
  • DIS cash to debt ratio is 0.34, higher than the average industry (0.10) and sector (0.13) cash to debt ratio. See DIS cash to debt chart.

5. What are the reasons to sell DIS? Why should I sell DIS stock?

Let's look at the reasons to sell DIS stock (i.e., the bear case):

  • The business model for the media networks depends on the continued growth of retransmission and reverse compensation fees. Any slowdown in the growth of these fees, perhaps because the pay-television business begins to shrink, would hurt the profitability of this segment.
  • Increases in the cost of popular programming such as sports events and television series could adversely affect margins at ESPN and ABC.
  • Developing mass-market hit programs can be unpredictable, especially as media fragmentation continues.
  • Considering price-to-earnings (P/E) ratio, Disney looks pretty overvalued when compared with the industry.
  • Advertising remains a significant source of revenue for Disney, which remains vulnerable to the macroeconomic headwinds. The deterioration in the economy and lower primetime ratings will adversely affect the advertising revenues and, in turn, the company’s revenue generating capabilities.
  • DIS quarterly revenue growth was -41.90%, lower than the industry and sector average revenue growth (0.60% and 0.78%, respectively). See DIS revenue growth chart.
  • DIS forward P/E ratio is 49.65, which is high compared to its industry peers’ P/E ratios. See DIS forward P/E ratio chart.
  • DIS Price/Book ratio is 2.78, which is high compared to its industry peers’ P/B ratios. See DIS forward Price/Book ratio chart.
  • DIS Price/Sales ratio is 3.46, which is high compared to its industry peers’ P/S ratios. See DIS forward Price/Sales ratio chart.
  • DIS PEG ratio (P/E adjusted for growth) is 41.16, which is high compared to its industry peers’ PEG ratios. See DIS PEG chart.
  • DIS Enterprise Value/Revenue multiple is 4.26, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See DIS Enterprise Value/Revenue chart.

Key Stats

6. What are DIS key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for DIS:

Metrics DIS
Price $130.21
Average Price Target / Upside $133.39 / 2.44%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Media - Diversified
Sector Consumer Cyclical
Number of Employees 201,000
Market Cap $241.33B
Forward P/E Ratio 49.65
Price/Book Ratio 3.46
Revenue (TTM) $69.76B
YoY Quarterly Revenue Growth -41.90%
Profit Margin -1.58%

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