The Walt Disney Company (DIS), based in Burbank, California, is one of the world’s largest entertainment companies. It produces and distributes film, television video streaming content, and more. With a market cap of $160 billion, the company operates through the Entertainment, Sports, and Experiences segments.
The entertainment giant has significantly underperformed the broader market over the past year. DIS stock is up 1.7% over the past 52 weeks, trailing behind the S&P 500 Index’s ($SPX) 15.8% gains over the same time frame. In 2024, DIS declined 2.8% compared to SPX’s 8.7% return on a YTD basis.
Zooming in further, Walt Disney has also underperformed the S&P 500 Communication Sector SPDR’s (XLC) 22.7% gains over the past 52 weeks and 13.3% returns on a YTD basis.
DIS stock fell sharply by 9.5% on May 7 after its Q2 earnings release, which showed revenue slightly below Wall Street expectations. Concerns about a seasonally weak Q3 for the streaming business and a slower pace of new movie releases further contributed to the decline. Moreover, recently, the stock dipped 3.4% after Isaac Perlmutter, one of the largest investors in the company, lost a proxy fight and sold his entire position of 25.6 million shares in the company.
For the current fiscal year, ending in September, analysts expect Walt Disney to report an EPS growth of 26.9% year over year to $4.77. The company has a history of surpassing consensus EPS estimates in its quarterly reports. In the last reported quarter, DIS exceeded the consensus estimates by 8%.
Among the 27 analysts covering the stock, the consensus rating is “Strong Buy.” That’s based on 18 “Strong Buy” ratings, four “Moderate Buys,” and five “Holds.”
This configuration is slightly more bullish than three months before, with 17 analysts recommending a “Strong Buy.”
On Jul. 30, Loop Capital Markets’ analyst Alan Gould maintained a “Buy” rating with a price target of $130.
DIS’ mean price target of $126.96 represents a premium of 44.6% to current price levels. The street-high target of $145 indicates a potential upside of 65.2% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
