Disney Stock Sails to the Top of the Dow After Earnings. Is It Time to Buy?
Walt Disney stock is higher Thursday after the entertainment giant beat earnings expectations and issued a strong outlook. Here's what Wall Street is saying.
Walt Disney (DIS) stock is the best Dow Jones stock Thursday after the entertainment and media giant beat top- and bottom-line expectations for its fiscal 2024 fourth quarter and provided positive guidance.
In the quarter ended September 28, Disney's revenue increased 6.3% year over year to $22.6 billion, boosted by 13.7% revenue growth in its Entertainment segment to $10.8 billion. Its earnings per share (EPS) rose 39% from the year-ago period to $1.14.
"This was a pivotal and successful year for The Walt Disney Company, and thanks to the significant progress we've made, we have emerged from a period of considerable challenges and disruption well positioned for growth and optimistic about our future," said Disney CEO Bob Iger in a statement. "Our solid performance in the fiscal fourth quarter reflected the success of our strategic efforts to improve quality, innovation, efficiency, and value creation."
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The results came in ahead of analysts' expectations. Wall Street was anticipating revenue of $22.5 billion and earnings of $1.10 per share, according to CNBC.
Disney ended the quarter with 122.7 million Disney+ Core subscriptions and 52 million Hulu subscriptions, an increase of 3.7% and 1.8%, respectively, from the prior quarter.
"With a strong lineup of beloved intellectual property in the works, Disney's content pipeline is looking particularly robust," says Third Bridge analyst Albie Amankona. "Upcoming releases like 'Moana 2,' which shifted from Disney+ to a theatrical release, underscore Disney's strategy of leaning into fan-favorite franchises. This approach maximizes cross-platform monetization, creating synergy across streaming, theaters, and the parks."
The company went on to provide its guidance for fiscal 2025. It expects earnings per share to rise in the high-single range compared to fiscal 2024, dividend growth that tracks its earnings growth and about $3 billion in stock buybacks.
DIS also provided an outlook for fiscal 2026 and 2027, calling for double-digit EPS growth in each of those years.
"We are confident in the long-term prospects for the business and believe we are well positioned for growth," Disney said.
Is Disney a buy, sell or hold?
Disney is up nearly 23% for the year to date and Wall Street is bullish on the stock. According to S&P Global Market Intelligence, the consensus recommendation among analysts it tracks is a Buy.
However, analysts' price targets have not been able to keep up with the blue chip stock's increasing share price. Indeed, the average analyst price target of $110.67 now represents a slight discount to current levels. Analysts may very well raise their prices targets in the days and weeks ahead following the strong quarter.
BofA Securities analyst Jessica Reif Ehrlich is one of those with a Buy rating on Disney stock and an above-average $120 price target.
"DIS has a collection of best-in-class premiere assets (in content and intellectual propert as well as Theme Parks)," Reif Ehrlich says. She adds that near-term catalysts for Disney include profitability inflection in direct-to-consumer and a reacceleration in its parks business.
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