Disney Q4 Earnings Preview: Analyst Optimistic On Disney+, Experiences But Cautions With Concerns Over TV, Film

Media giant Walt Disney Co DIS is set to report fourth-quarter financial results after market close Wednesday.

With the report including a summary of the fourth quarter and full fiscal year, one analyst said all eyes might be on the future of the company.

Earnings Estimates: Analysts expect Disney to report fourth-quarter revenue of $21.335 billion, according to data from Benzinga Pro. The revenue would be an increase from $20.15 billion in the prior year's period.

Disney has beaten revenue estimates from analysts in five of the last seven quarters.

Analysts expect Disney to report fourth-quarter earnings per share of 71 cents, which would be an increase from the 30 cents reported in the prior year's period. Disney has beaten earnings per share estimates from analysts in five of the last seven quarters, with one miss and one match.

Related Link: Disney Q4 Earnings Preview: Hulu Stake, Disney+, ESPN And ESPN Bet Top Items To Watch

What One Disney Analyst Is Saying: Analysts have been mixed on Disney heading into the fourth quarter earnings report.

Areas of focus heading into the new fiscal year are the main item to watch for Disney in the fourth quarter earnings report, Morgan Stanley analyst Benjamin Swinburne said.

"We see strong growth ahead at the Experiences and DTC segments but headwinds at Entertainment linear networks," Swinburne said.

The analyst, who has an Overweight rating and price target of $105, lowered estimates for the entertainment segment due to a more cautious outlook on linear television advertising and the lower expected film performance, which came as Disney shifted some movies from 2024 to 2025.

Swinburne said Disney's break out of the sports segment showed "a more stable ESPN."

"The ratings strength at ESPN has translated into stable advertising revenues, significantly outperforming the broader linear TV market."

Questions for the analyst for the sports segment include the highly anticipated NBA rights renewal, which could see new bidders and the future of the ESPN+ streaming platform.

For the Entertainment segment, the analyst saw a bigger business with several questions.

Disney's Direct-to-Consumer (DTC) segment removed ESPN+ from the financials, which could reduce losses for the segment.

"We are optimistic that Disney Plus price increases will be highly revenue and OI (operating income) accretive and that the ad-supported tier will drive strong advertising revenue growth at DTC in FY24."

Another concern from investors and analysts is the film division for the company, which has faced underperforming titles from key franchises.

DIS Price Action: Disney shares were up 0.68% to $84.59 at market close Tuesday versus a 52-week trading range of $78.73 to $118.18. Shares of Disney are down 16% in the past year.

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