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What Is Moving Disney (DIS) Stock Ahead of Earnings?

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Shares of Disney (DIS - Free Report) opened more than 0.5% lower on Tuesday, the last full trading period before the media behemoth is scheduled to release its second quarter earnings report. Just hours before this highly-anticipated announcement, Disney investors are also digesting news that a key competitor is encroaching on its deal to buy 21st Century Fox’s (FOXA - Free Report) assets.

Disney’s plan to annex Fox’s film, TV, and international properties looked to be nearing completion, but Comcast (CMCSA - Free Report) has reportedly tossed its hat in the ring with an offer that would increase the value of the acquisition to $60 billion. The original deal between Disney and Fox was for $52 billion.

At stake is the future of the filmed media industry, with the proposed AT&T (T - Free Report) – Time Warner merger still hoping to pass regulatory appeal and Comcast already announcing plans to scoop up the remaining chunk of Sky Broadcasting that it does not already own.

Which media conglomerates end up with what assets will be a key factor as television moves closer to consolidating the broadcasting and digital streaming business models. Disney has public plans to launch its own over-the-top streaming platform next year, and the rest of the industry is now scrambling to offer a competitive product in an arena that also includes Hulu, Netflix (NFLX - Free Report) , and Amazon (AMZN - Free Report) .

Disney investors will hope for an update on this platform when the company reports its latest results after the closing bell today. Shares of the entertainment giant are down more than 8% over the past year, so the stock could clearly use some invigoration wherever it can find it.

Our latest Zacks Consensus Estimates are calling for Disney to report earnings of $1.68 per share and revenue of $14.23 billion, which would represent year-over-year growth of 12.0% and 6.7%, respectively (also read: Is Disney Set to Beat Quarterly Earnings Estimates Today?).

Meanwhile, our Most Accurate Estimate for earnings—which only considers the most recent analyst EPS estimates—sits a penny higher than the consensus at $1.69 per share. This implies that analysts have become slightly more bullish on Disney’s Q2 report as we have gotten closer to the announcement.

It is also worth noting that Disney is trading at just 14.x forward 12-month earnings ahead of its report release. That valuation is close to the stock’s lowest forward earnings multiple over the past year. This might suggest that investor confidence has not quite mimicked analyst sentiment ahead of today’s earnings report.

Want more market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!

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