Walt Disney Co. faces a confluence of chaotic factors as it prepares to report its fiscal third-quarter earnings on Wednesday.
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What to expect
Earnings: Analysts tracked by FactSet expect Disney to report 97 cents a share in adjusted earnings, compared with $1.09 a share a year before. On Estimize, which crowdsources projections from hedge funds, academics and others, the average projection also calls for 97 cents a share in earnings.
Revenue: The FactSet consensus calls for $22.5 billion in revenue, up from $21.5 billion the previous year. Those contributing to Estimize also expect $22.5 billion in revenue.
Stock movement: Disney shares have been relatively flat this year, while the S&P 500 SPX is up 16% in 2023.
Of the 30 analysts tracked by FactSet who cover Disney shares, 18 have buy ratings, 8 recommend to hold and one has a sell rating, with an average price target of $112.26.
What to watch for
Anxious Wall Street analysts are bracing for a torrent of bad tidings for Disney, including lower linear-TV advertising sales, the uncertain fate of ESPN, leaking Disney+ subscriptions, a downturn in park attendance, the writers’ and actors’ strike and a political showdown with Florida Gov. Ron DeSantis.
Significant declines in operating margins in the last two quarters are likely to continue for the year, cautions Gimme Credit analyst Dave Novosel.
“Although the sale of the TV assets would make sense strategically for Disney, the question is who would buy them,” Novosel said in a note last month. “We do not see any natural suitors. And even if a buyer could be found, what price would these assets attract?”
