Key insights
- Disney's earnings are expected Wednesday, with options pricing suggesting a potential 6% move in either direction. Concerns about fuel prices and geopolitical uncertainty (Iran war) have weighed on the stock. Analysts are bullish, anticipating growth in the second half of the fiscal year. The new CEO's vision and any guidance updates will be closely watched for market direction.
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The Walt Disney Company is set to report earnings Wednesday for the first time under new CEO Josh D'Amaro, with traders expecting a big move in the entertainment giant's stock after the results.
Based on current options pricing, Disney (DIS) shares are expected to move up to 6% by the end of the week. A move of that size from Monday's levels around $102 could lift the stock above $108, its highest point since February, before D'Amaro took over in mid-March. The low end of that range could drag shares below $96.
Disney shares have lost ground recently, and are down about 10% from where they started the year, amid concerns that high fuel prices and geopolitical uncertainty caused by the Iran war could hurt Disney's experiences segment.
Many investors will be watching whether Disney's new CEO could offer more insights on his vision for the company's future during Wednesday's earnings call.
UBS analysts wrote recently that they expect the costs of Disney's investments in its cruise ships and theme parks, along with the timing of some of its theatrical releases, could push most of Disney's growth to the second half of its fiscal year.
Disney's fiscal second-quarter revenue is seen coming in at $24.83 billion, up about 5% year-over-year, while adjusted earnings per share are expected to have climbed 4 cents to $1.49, according to Visible Alpha estimates.
Wall Street analysts are widely bullish on Disney's outlook, with all seven analysts with current ratings tracked by Visible Alpha calling the stock a "buy." Their average price target of $131 would suggest nearly 30% upside from its recent levels.
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