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Disney (DIS) Reveals Its Future Projects at Destination D23

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Disney (DIS - Free Report) has been suffering from stiff competition and challenging macroeconomic conditions throughout this year. Shares of DIS have fallen 3.9% year to date against the Zacks Consumer Discretionary sector's rise of 8.5%.  

The theme park segment has been the only bright spot among Disney’s businesses. It recently provided updates about its theme park business at Destination D23 event. The expo announced the release of the Zootopia show, which will replace It's Tough to be a Bug performance at Disney's Animal Kingdom Theme Park's Tree of Life Theatre.

New introduction like a Pirates of the Caribbean-themed lounge is coming to Adventureland at Magic Kingdom Park in Florida, and a brand-new world-jumping vehicle is coming to Avengers Campus.

Disney also announced that its imagineers are reimagining the Test Track of EPCOT and Dinoland U.S.A. at Disney’s Animal Kingdom. The inspiration for Disney Land’s new Animal Kingdom design is taken from Encanto and Indiana Jones.



Disney's Theme Park Business to Aid Growth

Disney’s theme park business is benefiting from higher footfall at Shanghai Disney as well as other popular international destinations, including Frozen-themed Hong Kong Disneyland, Walt Disney Studios Park in Paris and Zootopia-themed Shanghai Disney Resort.

However, DIS has suffered from the underwhelming performance of its streaming business, Disney+ and the disappointing theatrical presentation of Ant-Man and the Wasp: Quantum Mania and Elemental.

Disney shares have underperformed its closest peers like Netflix (NFLX - Free Report) , Amazon (AMZN - Free Report) and Comcast (CMCSA - Free Report) . Shares of Netflix, Amazon and Comcast returned 46.8%, 70.2% and 28.6%, respectively.

Additionally, stiff competition from Comcast in the theme park as well as streaming business is hurting Disney’s prospects. Challenging economic conditions are expected to hurt footfall, impacting theme park segment revenues.

Nonetheless, DIS expects its revenues and operating income to grow at a high single-digit percentage rate from the prior year.

Moreover, Disney’s focus on sports streaming, particularly Live Sports in ESPN+, is expected to attract more subscribers. The renewal of MLB sports rights deal through 2028 and agreement with Spanish club football’s first division, La Liga, further strengthen the portfolio of the company’s sports content. These factors will be a tailwind in DIS’ international success regardless of facing stiff competition from Netflix and Amazon.

For the current quarter, this Zacks Rank #3 (Hold) company estimates revenues between $21.15 billion and $21.53 billion. The Zacks Consensus Estimate for the same is pegged at $21.3 billion, indicating year-over-year growth of 5.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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