Walt Disney & Co. (DIS) will release its Q1 earnings after the market closes on Wednesday.
The company is expected to see a continued slowdown in its Disney+ streaming division.
DIS – Weekly Chart
Walt Disney stock is also looking to build on its 2023 rally and repair the damage from the slowdown since 2021. The moving average provides resistance, and the subsequent critical level for traders to focus on the long side is ahead of $130.
Disney+ had 164 million paid subscribers as of October 2022, which is higher than the 118.1 million logged in the same month of 2021. Thanks to its top-name portfolio in the likes of Disney and Star Wars, a rapidly growing subscriber base has strengthened Disney’s potential in the increasingly saturated streaming space. The company faces competition from the likes of Amazon prime video and Netflix, as well as new services such as Apple, Peacock, and HBO Max. That competition is expected to hurt Disney+ growth in the current quarter. Analysts are estimating a 4.3% decline in subscribers to around 157 million.
The company’s Parks, Experiences, and Products business segment is also expected to have weighed on earnings as it struggles to recover fully from the COVID lockdowns in China. However, its US-based theme parks should get a lift from strong holiday-season-driven admission.
The earnings estimate for Parks, Experiences & Consumer Products revenues is currently around $7.99 billion, which would mark a growth of 10.5% from the year-ago period. Analysts expect the company to report $23.4 billion in revenues for Q1, an increase of 7.47% over the previous year when revenues were $21.8 billion. The per share estimates for Walt Disney are $0.784 per share compared to earnings of $1.06 per share from the same quarter last year.
For the full fiscal year, analysts expect Disney earnings per share of $4.15 compared to $3.53 in the previous year. For total year revenues, they expect income to come in at $90.55 billion, compared to $ 82.72 billion last year.
The critical area for Walt Disney is its Disney+ streaming division. Investors will have to see that the company is handling its competition in tv streaming before they offer a higher valuation.
