To The Moon

$Walt Disney(DIS)$ is scheduled to report its fiscal Q1 2025 earnings on 05 Feb 2025 before the market open.

For the last reported quarter, Disney was expected to post earnings of $1.09 per share, but it reported $1.14 per share instead, representing a surprise of 4.59%. For the previous quarter, the consensus estimate was $1.20 per share, while it actually produced $1.39 per share, a surprise of 15.83%.

For this fiscal Q1 2025 consensus EPS forecast, earnings per share is expected to come in at $1.46 which represent a 19.67% increase from the same period last year which recorded $1.22.

Walt Disney (DIS) Last Positive Earnings Call Give More Than 10% Gains Since

We have seen DIS gain 11.47% since its last positive earnings call on 14 Nov 2024, disney's earnings call demonstrates strong growth and strategic advancements, especially in streaming and creative achievements, despite short-term challenges such as weather impacts and international park fluctuations. The company's optimistic financial outlook and strategic moves position it for continued success.

Can Walt Disney (DIS) Guidance For Single-Digit EPS Growth Become Double?

During the Walt Disney Company's fourth-quarter earnings call for 2024, the executives provided forward-looking guidance, emphasizing their expectation of high single-digit adjusted EPS growth in fiscal 2025, with an acceleration to double-digit growth in fiscal 2026 and 2027.

They highlighted the strong performance of their creative content, including a record-breaking 60 Emmy Awards and the success of movies like "Inside Out 2" and "Deadpool & Wolverine," which have contributed to increased consumption on their streaming platforms. The company ended the quarter with 174 million Disney+ core and Hulu subscribers and reported that 60% of new U.S. subscribers opted for the ad-supported tier.

Disney also discussed significant investments in their Experiences segment, including the expansion of parks and cruise ships, and emphasized the importance of integrating technology advancements to enhance streaming engagement and reduce churn.

When looking at the last two reports, DIS has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 10.21%, on average, in the last two quarters.

Factors That Might Give Walt Disney (DIS) Higher Single-Digit EPS Growth

Record-Breaking Creative Achievements To Continue

Disney secured a record-breaking 60 Emmy Awards and Inside Out 2 and Deadpool & Wolverine were the top two movies of the year, showcasing Disney's creative strength and audience appeal. This might continue with more movies goers because of the year-end holidays.

Strong Subscriber Growth Might Slow Due To Netflix Competition

Disney+ and Hulu ended the quarter with 174 million core subscriptions, with more than 120 million core subscribers for Disney+ alone, indicating robust growth in digital streaming.

$Netflix(NFLX)$ has released some interesting title which have increased their subscribers significantly this might move some of DIS subscribers to Netflix.

Strategic Integration of Streaming Services An Important Milestone

Introduction of an ESPN tile on Disney+ set for 04 December 2024, marks the beginning of an integrated streaming experience, moving towards a full sports offering on Disney+ in 2025.

This could be an important milestone as the consumer preferences to go for ESPN under Disney+ should see subscribers increased.

Expansion in Disney Experiences

Disney Cruise Line will expand its fleet with the addition of Disney Treasure and seven more ships in development, along with multiple exciting expansions across parks.

Positive Financial Outlook

Expectations of high single-digit adjusted EPS growth in fiscal 2025, accelerating to double-digit growth in fiscal 2026 and 2027, highlighting confidence in financial performance.

This might be catalysed by better business strategy in the streaming business, subscriber should increased due to the holiday season.

Challenges Posed By Hurricanes and Dip in International Park Visits

Impact of Hurricanes on Q1

Q1 will be negatively impacted by the combination of two hurricanes and prelaunch costs for Disney Treasure, affecting short-term financial performance.

This could be short-term but should have significant impact on the earnings, expenses would increased.

Challenges in International Parks

Consumer softness in Shanghai and a temporary dip in attendance in Paris due to the Olympics affected international park performance.

The economic slowness in China could also affect the spending in Shanghai, as most of the visits are from locals during the holiday and festive season.

Technical Analysis - Exponential Moving Average (EMA)

We are seeing a nice defense by the bulls which helped DIS to stay above the 12-EMA, and with the earnings coming tomorrow (05 Feb) before the market open, we could be expecting some trading to happen around the range near its support level (26-EMA).

We could see some small correction down as investors might be looking to gain into this stock, so I am expecting the bulls to try daily uptrend expansions, as long as DIS can defend the support level near the 26-EMA, we could see a nice move of around 5% to the upside if we see a positive better-than-expected earnings.

Summary

We could be looking at higher single-digit EPS growth from DIS with their strategic growth on the subscribers, the ESPN introduction could bring some more subscribers.

Only things we need to watch might be the expenses for hurricanes and also the international park visits due to consumer spending slowdown in China.

Appreciate if you could share your thoughts in the comment section whether you think DIS could give an earnings surprise with higher single-digit EPS growth.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.