Analyst: If Content Is King, Disney Is 'King Of Content'

Walt Disney Co DIS is scheduled to report third-quarter results after Thursday's market close. As has been the case for the past few years, many investors likely feel anxious heading into the print given ongoing concerns with the ESPN unit and the impact of cord-cutting.

Investors are likely expecting further clarity relating to Disney's talks to buy most of Twenty-First Century Fox Inc FOXA's entertainment and media assets.

The Analyst

Tigress Financial's Ivan Feinseth.

The Thesis

The focus of Disney's earnings report will be twofold, Feinseth said in a newsletter: cable subscriber demand trends and the potential acquisition of Twenty-First Century Fox's media and entertainment assets. Disney CEO Bob Iger will likely decline to comment on any potential acquisition, but emphasize how important content is to the company, Feinseth said. (See Feinseth's track record here.)

"I have continued to say in media content is king, and Disney is the king of content," Feinseth said. A potential acquisition would be a "positive catalyst" for Disney's stock, which continues to trade sideways, the analyst said.

Aside from the potential acquisition, Disney is likely to also report positive year-over-year growth in its park, especially a new park in Shanghai that's performing better than expected.

What To Expect In Q3

Disney is expected to earn $1.16 per share on revenue of $13.32 billion in what some analysts are describing as another "transition" quarter for the company.

Disney's strategy for the next five years has been made "clear" with a focus on direct-to-consumer, ongoing investments in parks and a strong slate of movie releases over the year, Market Watch quoted RBC Capital Markets' Steven Cahall as saying in a note.

Given Disney's ongoing transition and multiyear game plan, investors may want to wait several years for any signs of success, the analyst said. Also important to consider: Who will replace Iger after the executive steps down in 2019.