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."
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 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.
Related Content
-
Investing Abroad Could Pay Off — Here's HowCountries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Retire in Belize for Stunning Natural Beauty and CultureBelize offers miles of protected land and ocean, a rich mix of cultures and a chill lifestyle. Best yet — the income requirement is just $2K per month.
-
Why Investing Abroad Could Pay Off
Countries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Are These the Next Stocks to Split?Interactive Brokers' recently split its stock to makes its shares more accessible to investors. Could these high-priced stocks be next?
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a RecessionRecessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income PlanningOnce you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.
-
Stock Market Today: Stocks Swing as Trump Scraps Canada Trade TalksDespite a mid-afternoon slip, the S&P 500 and Nasdaq ended the day at new record highs.
-
Why Smart Retirees Are Ditching Traditional Financial PlansFinancial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around YouWhile thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
