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The Zacks Analyst Blog Highlights: Disney

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For Immediate Release

Chicago, IL –August 7, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Disney (DIS - Free Report) .

Here are highlights from Tuesday’s Analyst Blog:

Disney Earnings After the Bell: What’s Next for Streaming?

Earnings season is coming to an end with more than 3/4th of the market having already released their 2nd quarter results. Disney is set to release its June quarter earnings after the bell today and investors are on the edge of their seat waiting for more color on the anticipated Disney+ platform, set to hit the consumer markets later this year.

Disney is not typically a big mover on earnings releases with the past 6 reports having an average subsequent price impact of less than 1%. DIS analysts are estimating an EPS of $1.76, which would represent a 6% year-over-year decline. Sales, on the other hand, are expected to be $21.7 billion, the largest in the history of the company with the recent 21st Century Fox acquisition boosting these figures.

The 21st Century Fox acquisition is going to have its initial merger costs, but long-run synergies from the increased scale and content should prove profitable. I believe that the full potential of this merger hasn’t been entirely priced into most analysts’ estimates.

Disney+

Disney is evolving to meet the consumer shift in media consumption. There are a growing number of cord-cutters who would prefer to view their favorite shows on-demand and avoid annoying commercials. Disney launched ESPN+ last year for users to stream live sports, and just obtained a majority stake in the Hulu streaming platform from the Fox acquisition.

Disney is set to launch Disney+, its flagship streaming platform, on November 12th, and this is expected to shake up the streaming category. DIS surged 12% the day this platform was unveiled while NFLX dipped 4.5%.

Disney’s acquisition of Fox earlier this year was the final piece of the content puzzle that Disney needed to launch the Disney+ streaming platform. They will offer 90 years of quality content and are developing a number of TV shows that will be exclusively on this streaming platform.  

This pivot has already begun to thrust this reliable value stock back into growth, sending valuations surging. I expect that valuations will continue to grow as Disney+ gains traction domestically as well as internationally.

Take Away

This evening’s earnings report will give us more clarity on how their current direct-to-consumer platforms (Hulu and ESPN+) are preforming thus far.

I believe that Disney+ is going to be the driving force of DIS’s topline moving forward with its current broadcasting and media segment seeing recent negative bottom-line growth. Look for management guidance and further color on this streaming platform and what we should initial expect for costs and sales.    

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