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Takeaways
- The Walt Disney Company is set to report fiscal second-quarter results Wednesday morning, and analysts are largely bullish on the media and entertainment giant's stock.
- Analysts expect revenue will have increased from the previous quarter, but profits to have decreased.
- UBS analysts said they expect a strong quarter, but said a recession would pose risks to Disney's advertising and experiences segments.
The Walt Disney Company’s (DIS) fiscal second quarter results are scheduled to be released before the opening bell of Wednesday. Analysts have a generally positive outlook on the stock.
Five of the seven analysts tracked by Visible Alpha who cover Disney rate the stock as a "buy," while the other two dub it a "hold." Their average price target is $120, a nearly 30% premium to the stock's closing level Friday, suggesting analysts think shares will reverse their roughly 19% decline since the end of February.
The conglomerate expects to report second-quarter revenues of $23,17 billion, up by 5% from last year, while adjusted earnings are expected to be down by a penny at $1.20.
Analysts Expect Solid Q2 But Warn of 'Recession Risk' Ahead
UBS analysts recently reiterated their "buy" rating in a note previewing Disney's earnings, but trimmed their price target to $105 from $130. The analysts said they expect the firm's second quarter to "reflect resilient demand across the parks, initial upside from the new cruise ship and solid sports advertising," but see "recession risk" in the second half of the fiscal year that could hit advertising revenue and park visits.
Disney’s revenue and profits topped expectations in the first quarter, but it reported an unexpected drop in Disney+ subscribers, to 124.6m. It said it would expect another “modest” decline in the second. Visible Alpha consensus predicts 123.7 million Disney+ subscriptions at the end the second quarter.
