Disney Stock Dives After Earnings. Here's Why
Walt Disney stock is down Tuesday after the company came up short of revenue expectations for its fiscal second quarter. Here's what you need to know.


Walt Disney (DIS) stock is down nearly 10% midday Tuesday after the media and entertainment giant's revenue came up short of Wall Street's expectations for its fiscal second quarter.
In the three months ended March 30, Disney's revenue increased 1.2% year-over-year to $22.08 billion. Earnings per share (EPS) were up 30.1% to $1.21 from the year-ago period.
Disney's results were given a boost by strong numbers from Disney+ and Hulu, which each posted a profit for the first time ever in the March quarter. Additionally, Disney+ Core subscribers were up 6% compared to the end of 2023 to 117.6 million. ESPN, on the other hand, saw a 9% decline in operating income and a 2% drop in paid subscribers.

Sign up for Kiplinger’s Free E-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.
The top- and bottom-line results were mixed compared with analysts' expectations. According to CNBC, Wall Street was anticipating revenue of $22.11 billion and EPS of $1.10.
As a result of its impressive earnings results in the first six months of its fiscal year, Disney raised its full-year EPS outlook, now calling for 25% year-over-year growth vs its previous guidance of 20% growth.
"Our strong performance in Q2, with adjusted EPS up 30% compared to the prior year, demonstrates we are delivering on our strategic priorities and building for the future," Disney CEO Bob Iger said in a statement. "Our results were driven in large part by our Experiences segment as well as our streaming business. Importantly, entertainment streaming was profitable for the quarter, and we remain on track to achieve profitability in our combined streaming businesses in Q4."
Is Disney stock a buy, sell or hold?
Despite Disney's mixed results, analysts are still overwhelmingly bullish on the blue chip stock. According to S&P Global Market Intelligence, analysts' average target price for DIS stock is $126.48, representing implied upside of more than 20% to current levels. Additionally, the consensus recommendation is Buy.
BofA Securities is one of the firms with a Buy rating on Disney stock. It also has a $145 price target, representing implied upside of nearly 40% to current levels.
"DIS reported a solid fiscal second quarter with revenue essentially inline and operating income modestly ahead of our expectations," BofA analyst Jessica Reif Ehrlich said in a May 7 note. She adds that near-term catalysts for the Dow Jones stock include an inflection in profitability for its direct-to-consumer division and additional updates on the company's strategic priorities.
Today's pullback makes for an attractive buy-the-dip setup, says Don Montanaro, president of Firstrade. "Smart investors might want to buy Disney when it dips like it has today, and then patiently hold as the future dynamism of streaming revenues emerges over time," Montanaro says. "Imagine ESPN as a personalized streaming service including integrated social media interactions with star athletes plus easy gambling at viewers" fingertips. That's a differentiated, modern experience."
The executive adds that investors who share this long-term outlook and have plenty of patience should adopt a buy-and-hold strategy with Disney stock.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Ask the Editor — Tax Questions on What Congress Will Do Next
Ask the Editor In this week's Ask the Editor Q&A, we answer questions from readers on what Congress will do next with taxes.
-
When Tech is Too Much
Our Kiplinger Retirement Report editor, David Crook, sounds off on the everyday annoyances of technology.
-
Bonds Pay in Good and Bad Times
Bonds can act as a financial safety net through good times and bad. But different bonds carry different returns and risks, so do your homework before investing.
-
When You Need Capital Quickly, Think 'Ready, Set, Fund': A Financial Adviser's Strategy
Investors must be able to free up cash to meet short-term needs from time to time. This strategy will help you access capital without derailing your long-term goals.
-
I'm an Estate Planner: Moving Family Assets to a Safe Haven Abroad Could Be a Huge Headache for Your Heirs
In troubled times like these, wealthy clients may seek financial refuge outside of the U.S. But that could cause more tax and estate problems than it solves.
-
S&P 500 Extends Losing Streak Ahead of Powell Speech: Stock Market Today
Stocks continued to struggle ahead of Fed Chair Powell's Friday morning speech at Jackson Hole.
-
A Timeline of Warren Buffett's Life and Berkshire Hathaway
Buffett was the face of Berkshire Hathaway for 60 years. Here's a timeline of how he built the sprawling holding company and its outperforming equity portfolio.
-
What Will Powell Say In His Jackson Hole Speech?
Fed Chair Jerome Powell will likely walk a fine line in his Friday morning speech at the Jackson Hole symposium, but Wall Street is hoping for rate-cut clues.
-
Fall Is Tax Time? Yes! Act Now to Make Needed Adjustments
Review your withholdings, contribute to tax-saving HSA and FSA accounts, manage a bonus' impact and adjust for major life events such as weddings and job changes.
-
Board Service in Retirement: The Best Time to Join a Board Is Before You Retire
Many senior executives wait until retirement to take a seat on a corporate board. But making this career move early is a win-win for you and your current organization.