Walt Disney (DIS) stock is trading modestly lower Wednesday despite the entertainment and media giant reporting higher-than-expected top- and bottom-line results for its fiscal third quarter and raising its full-year profit forecast.
In the quarter ended June 29, Disney's revenue increased 3.7% to $23.16 billion, driven by 4.5% growth in its Entertainment segment to $10.58 billion. Its earnings per share (EPS) were up 35% from the year-ago period to $1.39.
Disney's results were boosted by its direct-to-consumer (DTC) entertainment business, consisting of Disney+, Hulu and ESPN+, which combined to post a profit for the first time ever and one quarter ahead of the company's guidance.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Separately, Disney also announced price increases for these streaming services yesterday, according to CNBC. Beginning in mid-October, most Disney+, Hulu and ESPN+ plans will increase by $1 to $2 per month.
"Our performance in Q3 demonstrates the progress we've made against our four strategic priorities across our creative studios, streaming, sports, and Experiences businesses," said Disney CEO Bob Iger in a statement. "This was a strong quarter for Disney, driven by excellent results in our Entertainment segment both at the box office and in DTC, as we achieved profitability across our combined streaming businesses for the first time and a quarter ahead of our previous guidance."
The results beat analysts' expectations. Wall Street was anticipating revenue of $23.07 billion and earnings of $1.19 per share, according to CNBC.
For the second consecutive quarter, Disney raised its full-year profit forecast. The company now anticipates earnings-per-share growth of approximately 30%, up from its previous forecast of 25% growth.
Is Disney stock buy, sell or hold?
Disney is near the bottom of the pack this year as far as Dow Jones stocks go. Yet, Wall Street is bullish on shares. According to S&P Global Market Intelligence, analysts' average target price for DIS stock is $122.59, representing implied upside of nearly 40% to current levels. Additionally, the consensus recommendation is Buy.
Not everyone is as optimistic toward the blue chip stock, though. Financial services firm CFRA has a Hold rating on Disney stock with a $100 price target.
"We think a further strategic realignment may be needed in linear," wrote CFRA Research analyst Kenneth Leon in a July 23 note. "Cable pay TV, including ESPN and the ABC network, is a legacy unit that is losing advertising revenue and pay TV subscribers. Sports rights and the hefty offer to air the NBA should be called out on the earnings call."
Related Content
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
Want To Retire at 55? See If You Can Answer These Five QuestionsWho said you can’t retire at 55? If you say yes to these questions, you may be on your way to an early retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
-
One Small Step for Your Money, One Giant Leap for RetirementSaving enough for retirement can sound as daunting as walking on the moon. But what would your future look like if you took one small step toward it this year?
-
This Is What You Really Need to Know About Medicare, From a Financial ExpertHealth care costs are a significant retirement expense, and Medicare offers essential but complex coverage that requires careful planning. Here's how to navigate Medicare's various parts, enrollment periods and income-based costs.
-
I'm a Financial Planner: Could Partial Retirement Be the Right Move for You?Many Americans close to retirement are questioning whether they should take the full leap into retirement or continue to work part-time.
-
From Mortgages to Taxes to Estates: How to Prepare for Falling Interest RatesAs speculation grows that the Federal Reserve will soon start lowering interest rates, now is a good time to review your financial plans for housing, estate, taxes, investing and retirement to make the most of potential changes.
-
This Is How Lottery Winners Build Lasting Legacies, From a Financial ProfessionalWinning a massive lottery jackpot, like the recent $1.4 billion Powerball, requires seeking immediate legal and financial counsel, protecting your identity and winnings and planning your legacy.
-
S&P 500 Slips Ahead of Fed Week: Stock Market TodayAll eyes are on the Federal Reserve ahead of next week's critical policy meeting.
-
September Fed Meeting: Live Updates and CommentaryThe September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
