What to Look For in Disney Earnings

Walt Disney Co. (NYSE: DIS) is scheduled to release its most recent quarterly results after the markets close on Tuesday. The consensus estimates call for $1.61 in earnings per shares (EPS) and $15.45 billion in revenue. The fiscal first quarter of last year reportedly had EPS of $1.55 and $14.78 billion in revenue.

Compared to the rest of the Dow Jones Industrial Average, Disney did not have a strong 2017. Although shares only eked out a small gain for last year, it is still a powerhouse to contend with. This year, Disney may be facing some difficulties, but it stands to disrupt and continue to take market share.

The company is already on track to be the top U.S. studio in terms of domestic box office sales, and likely it will have a market share, by that measure, above 22%, which will put it ahead of the other big four studios.

Disney also will buy most of the assets of Twenty-First Century Fox Inc. (NASDAQ: FOXA) this year at a price of $52 billion. Taken together once the deal closes, these two studios owned by Disney could have a market share of domestic box office as high as a third of the U.S. total.

Ahead of the report, Merrill Lynch weighed in on the Mouse House:

We are raising our DIS PO to $144 (vs. $130 prev.) on a higher CY18E EPS due to a significantly reduced tax rate. Results will reflect solid Studio and Theme Park trends partially offset by tough CP comps and headwinds at Media Networks. Our F1QE EPS remains $1.67 and our FY18E EPS rises to $7.14 largely on taxes. We reiterate our Buy rating on DIS shares.

Excluding Tuesday’s move, Disney had underperformed the broad markets, with the stock down about 2.6% year to date. Over the past 52 weeks, Disney is actually down 5%.

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

  • Cowen has a Hold rating with a $102 price target.
  • Morgan Stanley has an Overweight rating and a $130 target.
  • Loop Capital has a Hold rating with a $108 price target.
  • B. Riley has a Hold rating with a $122 price target.
  • Barclays has a Hold rating and a $105 price target.
  • Pivotal Research has a Sell rating with a $93 target price.

Shares of Disney were down about 1% at $103.55 Tuesday morning, with a consensus analyst price target of $118.15 and a 52-week trading range of $96.20 to $116.10.