The Walt Disney Company (NYSE: DIS) has confirmed that it will release its fiscal Q1 2022 earnings report on Wednesday, February 9, 2022, after market close.
What to look for
This month Walt Disney expects a flurry of activity, and the stock has a lot of growth to make after the 15% drop last year and 8% decline year to date. The company will release its earnings on February 9, and investors will be keen on how the company performed in terms of Disney+ subscribers. YoY gains are expected to be impressive, and although growth slowed last year after an exceptional debut year for Disney+, the 118 million subscribers is a major feat.
Earnings: Stockearning’s Estimated EPS for the first quarter of 2022 is expected to be $0.58 per share. In the same quarter a year ago, the company had earnings per share of $0.32. Disney missed Q4 2021 EPS by 26% by positing EPS of $0.37 versus estimated EPS of $0.5. Historical EPS Performance shows that in the past 12 quarters, the company has topped EPS estimates 27 times (77%), met once (2%), and missed seven times (20%).
Revenue: Disney expects to post revenue of $18.9 billion in Q1 2022, representing a YoY growth of 16%. In the third quarter, the company reported $18.534 billion and a full-year revenue of $67.418 billion.
Stock movement: DIS shares have lost 18% since the company released its fourth-quarter earnings. Interestingly, DIS shares have been DOWN 27 times out of the past 48 quarters. So, the historical price reaction suggests a 56% probability of the share price going DOWN once the company reports its fiscal Q1 2022 earnings. According to the Stockearning algorithm, the predicted first-day move is 2%, while the predicted move on the seventh day is 3%.
What analysts are saying
MoffetNathanson analyst Michael Nathanson slashed his price target on DIS from $175 to $165 but maintained a Hold rating in the stock. Following his yearly Disney 10-K analysis and taking into consideration management remarks, the analyst said his Fiscal 2022 free cash flow projection of $1.9 billion following Shanghai adjustment is "a huge fall" of over 60% from his earlier estimate of $5.1 billion. Nathanson also mentioned that he had cut his out-year free cash flow predictions to account for greater working capital pulls due to increased programming spending. Disney CEO Bob Chapek has a chance to reshape the firm, but the COVID-19 epidemic has dealt him a "really terrible hand," and the company's primary strategic options are "quite restricted at this juncture," according to Nathanson's statement to investors.
Investors should focus beyond "lighter" first-half 2022 Disney+ subscriber gains and "near-term turbulence" at the heritage businesses, according to JPMorgan analyst Alexia Quadrani. According to the analyst, subscriber growth will pick up in the 2H 2023, and a larger recovery of the heritage business, with Parks returning to pre-COVID profit levels in 2023. Disney is still Alexia's favorite media firm because she thinks it has the strongest IP rights in the market and has yet to reap the benefits of the "flywheel of customer interactions." Quadrani maintains a Buy rating on the stock, with a target price of $220.
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