Shares of media company Disney (DIS) are down in today’s trading as investors await its Q3 earnings results on August 7 before the market opens. Analysts are expecting earnings per share to come in at $1.20 on revenue of $23.089 billion. This equates to 16.5% and 3.4% year-over-year increases, respectively, according to TipRanks’ data.
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This is ideal because earnings per share should grow faster than revenue as this demonstrates a high degree of operating and financial leverage in the business. It’s also worth noting that Disney has beaten earnings estimates for four consecutive quarters, and there is good reason to expect another beat, according to analysts.
Indeed, TipRanks’ Bulls Say, Bears Say tool pictured below points to the company’s box office success as a positive catalyst for the stock. The bulls note how Disney’s recent movie, Inside Out 2, surpassed the $1 billion mark in its first three weeks. In addition, the firm’s cruise business is expected to see meaningful growth over the next two years.
However, we should never forget about the bearish arguments. Some concerns among analysts include softening consumer demand and amusement park attendance. In fact, weakness from amusement parks alone could result in a $500 million headwind in 2026.
Options Traders Anticipate a Large Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a large 7.7% move in either direction.
Is Disney a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 21 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 2.3% rally in its share price over the past year, the average DIS price target of $127.64 per share implies 44.44% upside potential.
