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
-
What to Know About Portable MortgagesA closer look at how portable mortgages would work, who might benefit and why the concept is gaining attention amid high rates and limited supply.
-
10 Cities Where Grocery Prices Are HighestThese 10 cities are paying up to 33% more than the rest of the country to keep food on the table.
-
Here's How to Plan This Year's Roth Conversion, From a Wealth ManagerWhile time is running out to make Roth conversions before the end of the taxable year, consider taking your time and developing a long-term strategy.
-
Four Times You Need a Second Opinion on Your Financial PlanIs your financial plan fit for purpose — or is your adviser peddling an outdated strategy? When you see these red flags, it's time for a second opinion.Evan
-
'But It's Not My Fault!': Your Insurance Company Absolutely Will Blame You in These Five ScenariosInsurance companies care about 'fault' in more ways than you think — from payment mishaps to your neighbor's landscaping — so it's on you to manage the risks.
-
Dow Dives 797 Points as Government Opens: Stock Market TodayThe process of pricing and re-pricing realities old and new never stops, and next week promises to be at least as exciting as this week.
-
5 Core Stocks Every Investor Should Own In 2026 and BeyondCore stocks are solid, long-term investments that provide stable returns and steady growth within your portfolio. Here are five we like.
-
How to Calm Your Retirement Nerves When It's Time to Shift from Savings Mode to Spending ModeTransitioning from saving to spending in retirement can be tricky, but devising a strategic plan can help ensure a smooth and worry-free retirement.
-
Why Wills and Trusts Aren't Enough in the Great Wealth Transfer, From an Attorney Who KnowsFamilies need to prepare heirs through communication and financial know-how, or all that money could end up causing confusion, conflict and costly mistakes.
-
Private Markets for Main Street: What Financial Advisers' Clients Need to KnowWith product innovation 'democratizing' private market access for everyday investors, advisers must step up their game to educate clients on the pros and cons.
