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Walt Disney (DIS) Gains But Lags Market: What You Should Know

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Walt Disney (DIS - Free Report) closed at $173.64 in the latest trading session, marking a +0.8% move from the prior day. This move lagged the S&P 500's daily gain of 1.39%. Elsewhere, the Dow gained 0.83%, while the tech-heavy Nasdaq added 1.97%.

Prior to today's trading, shares of the entertainment company had gained 1.06% over the past month. This has outpaced the Consumer Discretionary sector's gain of 0.42% and lagged the S&P 500's gain of 2.58% in that time.

Investors will be hoping for strength from DIS as it approaches its next earnings release, which is expected to be February 11, 2021. In that report, analysts expect DIS to post earnings of -$0.46 per share. This would mark a year-over-year decline of 130.07%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $15.58 billion, down 25.32% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.45 per share and revenue of $68.68 billion, which would represent changes of -28.22% and +5.09%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DIS. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 21.82% lower within the past month. DIS is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, DIS currently has a Forward P/E ratio of 118.41. Its industry sports an average Forward P/E of 67.11, so we one might conclude that DIS is trading at a premium comparatively.

We can also see that DIS currently has a PEG ratio of 5.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Media Conglomerates industry currently had an average PEG ratio of 5.76 as of yesterday's close.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 252, which puts it in the bottom 2% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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