Walt Disney (DIS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Walt Disney (DIS) closed at $132.17 in the latest trading session, marking a -0.85% move from the prior day. This change lagged the S&P 500's 0.49% loss on the day. At the same time, the Dow lost 0.59%, and the tech-heavy Nasdaq lost 0.8%.

Heading into today, shares of the entertainment company had lost 2.04% over the past month, lagging the Consumer Discretionary sector's gain of 3.07% and the S&P 500's gain of 3% in that time.

Investors will be hoping for strength from DIS as it approaches its next earnings release. The company is expected to report EPS of $1.07, down 27.7% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.97 billion, up 32.61% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.99 per share and revenue of $70 billion. These totals would mark changes of -15.4% and +17.79%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for DIS. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. DIS is holding a Zacks Rank of #5 (Strong Sell) right now.

Looking at its valuation, DIS is holding a Forward P/E ratio of 22.24. Its industry sports an average Forward P/E of 14.78, so we one might conclude that DIS is trading at a premium comparatively.

Investors should also note that DIS has a PEG ratio of 4.41 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Media Conglomerates was holding an average PEG ratio of 2.66 at yesterday's closing price.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 193, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DIS in the coming trading sessions, be sure to utilize Zacks.com.


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