Entertainment powerhouse The Walt Disney Company (NYSE:DIS) is scheduled to report its fourth quarter and full year Fiscal 2022 results on November 8, after the market closes. Disney’s unreported quarter may have been impacted by inflationary pressures, Hurricane Ian’s impact on certain of its Parks, and COVID-19-related shutdowns in China. At the same time, recent price hikes at Disney’s Theme Parks may have marginally boosted its performance.
The Street expects Walt Disney to post an adjusted profit of $0.55 per share in Q4, meaningfully higher than the prior-year period figure of $0.37 per share. However, the Q4 expectation is well below the Q3FY22 adjusted earnings of $1.09 per share. Meanwhile, revenue is pegged at $21.25 billion, representing a 14.7% year-over-year jump.
Factors to Watch For
Disney’s Theme Parks have been a major focus during the quarter as travel has rebounded and people are visiting entertainment spots in droves despite the inflationary pressures. Also, Walt Disney Studios, its production house, is expected to perform well, with theaters running at nearly full capacity now.
Meanwhile, Disney’s streaming services pose a mixed picture as TV subscriptions take a back seat to online streaming services. Luckily for Disney, it has major operations on both platforms. Also, Disney is starting its ad-tiered subscription plans at $7.99 per share next month, which may attract more subscribers.
Investors and analysts will pay special attention to the subscriber numbers and revenue per user per month at all of its streaming services, including Disney+, ESPN+, and Hulu.
Is Disney a Buy, Sell, or Hold?
With 14 Buys and three Hold ratings, Walt Disney stock commands a Strong Buy consensus rating. On TipRanks, the average Walt Disney price forecast of $144.64 implies 45.3% upside potential to current levels. Meanwhile, DIS stock has lost 36.5% year to date.
Further, Disney trades at a current Price/Sales multiple of 2.9x, making the stock seem too cheap to ignore.
Ending Thoughts
Disney’s fourth-quarter results are expected to surpass expectations. Both Theme Parks and Streaming services are making changes to attract more customers and improve performance. Also, TipRanks Website Traffic Tool indicates that in Q4, the total estimated visits to all of Disney’s websites increased a whopping 39.6% year-over-year and 12.94% sequentially. All these indicate a solid quarterly performance for the House of Mouse company.
