Walt Disney Co (DIS) Earnings to Let Wall Street See “Star Wars” Early

walt disney co (NYSE:DIS)

Walt Disney Co has beaten the consensus analyst estimate in 18 out of the last 20 quarters and the firm has consistently outperformed estimates in the last 16 quarters. The firm posted earnings surprise of 10.81% in the first quarter and it has delivered an average positive surprise of 9.74% in the last four quarters. Disney is set to release its third quarter (Q3 2015) earnings result after the market close today.


The shares of Disney are blazing ahead of the earnings release today as the stock made a new 52-week high of $121.73. As at 11:17AM EDT, the shares of Disney were still trading up with gains of 0.52% around $120.63. The bullish sentiment being recorded in the shares of Disney today is based on positive analysts’ sentiment ahead of earnings.

Star Wars: Episode VII The Force Awakens is Key

Star Wars: Episode VII The Force Awakens holds much promise as a key revenue driver for Disney in FY 2015 and there’s no shortage of analyst sentiment on how Disney will perform in the current and subsequent quarters.

Leading the analyst thought pool is a report from analyst Benjamin Mogil of Stifel. Benjamin Mogil raised his price target on Walt Disney Co from $120 to $130 and he raised the full year EPS estimate from $5.74 to $5.96.

Benjamin Mogil says “two major variables for performance” should interest investors. The first variable is movements in exchange rate and the second variable is the lag between the global release date of Star Wars: Episode VII The Force Awakens and the Chinese release date.

Mogil expects the movie to bring in total global box office at $2.2bn, with $700M from the domestic market, $450M from China and $1B from the rest of the world.

Bullish Sentiments Reveal High Expectations for Star Wars

Analysts are very interested in seeing how Walt Disney Co will perform this year as Star Wars: Episode VII The Force Awakens hits the screens. The average consensus estimate holds for EPS of $1.42 (higher than the previous $1.39) on revenue of $13.23B. For the full year, the forecast is for net income of $5.05 a share on sales $52.6 billion

Alexia Quandrani of J.P. Morgan reiterated his “Buy” rating on Disney and he has a $121 price target on the stock. The J.P. Morgan analyst is positive on Disney “for its consistent content execution and earnings strength that has produced six consecutive ‘beat and raise’ quarters.”

Joseph Bonner of Argus Research maintained his “Buy” rating on Walt Disney Co and he has raised the price target from $115 to $123. He posits “the positive outlook on Disney’s new Star Wars movie release in December of this year as factors warranting the bullish rating”.

Jessica Reif Cohen of Merrill Lynch maintained a “Buy” rating with a price target of $130 on the stock. Cohen says success in the firm’s media network business “paired with a positive forecast for its studio as positive indicators for its Q3 earnings”.

Later on today, Walt Disney Co  should reveal its outlook for the rest of the year, and give Wall Street a glimpse at how good the next Star Wars film is really going to be.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.

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