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
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
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
-
Stocks Keep Climbing as Fed Meeting Nears: Stock Market TodayA stale inflation report and improving consumer sentiment did little to shift expectations for a rate cut next week.
-
Your End of Year Insurance Coverage Review ChecklistStop paying for insurance you don't need and close coverage gaps you didn't know about with this year-end insurance review.
-
Crypto Trends to Watch in 2026Cryptocurrency is still less than 20 years old, but it remains a fast-moving (and also maturing) market. Here are the crypto trends to watch for in 2026.
-
Stocks Keep Climbing as Fed Meeting Nears: Stock Market Today
A stale inflation report and improving consumer sentiment did little to shift expectations for a rate cut next week.
-
Crypto Trends to Watch in 2026
Cryptocurrency is still less than 20 years old, but it remains a fast-moving (and also maturing) market. Here are the crypto trends to watch for in 2026.
-
Time Is Running Out to Make the Best Moves to Save on Your 2025 TaxesDon't wait until January — investors, including those with a high net worth, can snag big tax savings for 2025 (and 2026) with these strategies.
-
4 Smart Ways Retirees Can Give More to Charity, From a Financial AdviserFor retirees, tax efficiency and charitable giving should go hand in hand. After all, why not maximize your gifts and minimize the amount that goes to the IRS?
-
I'm an Insurance Pro: If You Do One Boring Task Before the End of the Year, Make It This One (It Could Save You Thousands)Who wants to check insurance policies when there's fun to be had? Still, making sure everything is up to date (coverage and deductibles) can save you a ton.
-
Small Caps Hit a New High on Rate-Cut Hope: Stock Market TodayOdds for a December rate cut remain high after the latest batch of jobs data, which helped the Russell 2000 outperform today.
-
What Investors May Face in the New Year: InterviewKeith Lerner, the chief market strategist and chief investment officer for Truist Wealth, speaks with Kiplinger.
-
3 Year-End Tax Strategies for Retirees With $2 Million to $10 MillionTo avoid the OBBB messing up your whole tax strategy, get your Roth conversions and charitable bunching done by year's end.
