Based in Burbank, California, The Walt Disney Company (DIS) is among the world’s largest entertainment companies, producing and distributing film, TV, and streaming content. With a market cap of $173.8 billion, it operates through its Entertainment, Sports, and Experiences segments.
The entertainment titan has underperformed the broader market over the past year. DIS stock is up 18.2% over the past 52 weeks, trailing behind the S&P 500 Index’s ($SPX) 35.2% gains over the same time frame. In 2024, DIS soared 6.1% compared to SPX’s 20.1% return on a YTD basis.
Zooming in further, Walt Disney has also lagged behind the Communication Services Select Sector SPDR ETF Fund’s (XLC) 40.7% gains over the past 52 weeks and 27.2% returns on a YTD basis.
On Aug. 7, DIS reported stronger-than-expected Q3 results, with adjusted EPS of $1.39 and revenue of $23.2 billion. However, shares dropped 4.5% amid concerns about slowing demand in its Parks, Experiences, and Products segment, with a projected “mid-single-digit” decline in parks’ operating income due to lower attendance and spending, especially in domestic parks and Disneyland Paris. Besides, rising operational costs and upcoming expenses for Disney Cruise Line added to investor concerns, while a modest outlook for Disney+ subscriber growth overshadowed improvements in streaming profitability.
For the current fiscal year, which ended in September, analysts expect Walt Disney to report an EPS growth of 31.1% year over year to $4.93. The company has consistently surpassed consensus EPS estimates in each of its past four quarterly reports.
Among the 29 analysts covering the stock, the consensus rating is “Strong Buy.” That’s based on 19 “Strong Buy” ratings, three “Moderate Buys,” and seven “Holds.”
This configuration is slightly more bullish than two months before, with 18 analysts recommending a “Strong Buy.”
On Oct 23, Needham & Company LLC reaffirmed its "Buy" rating on DIS, setting a $110 price target.
DIS’ mean price target of $114.92 represents a premium of 19.9% to current price levels. The street-high target of $136 indicates a potential upside of 41.9% from current price levels.
On the date of publication, Kritika Sarmah 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.
