Disney On Retail’s Radar Ahead Of Q4 Print: Did Jimmy Kimmel Saga Dent Streaming Performance?

• According to Fiscal.ai-compiled consensus, Disney is expected to report adjusted EPS of $1.02 and revenue of $22.78 billion.
• Morgan Stanley expects Disney to end the fiscal year 2025 with adjusted earnings per share growth of over 20%.
• Retail traders are bracing for a solid earnings beat.

Entertainment giant Walt Disney Co.’s (DIS) stock trended on Stocktwits late Wednesday as retail traders looked ahead to the company’s quarterly results due before the market opens on Thursday.

Disney’s stock has underperformed the broader market, clocking gains of a little over 5% year-to-date, compared to the 17%+ gain for the SPDR S&P 500 ETF (SPY) and the 18% rise for the Communication Services Select Sector SPDR ETF Fund (XLC).

What Analysts Model For Disney’s Q4

According to Fiscal.ai-compiled consensus, Disney is expected to report adjusted earnings per share (EPS) of $1.02 and revenue of $22.78 billion. This compares to $1.14 per share in adjusted earnings and $22.57 billion in revenue that the Mouse House reported a year ago.

The primary focus would be on Disney+ net additions, given the Jimmy Kimmel controversy in late September, Morgan Stanley said in a note released on Sunday. Disney’s ABC subsidiary had taken his late-night show off the air for nearly a week in late September, bowing to pressure from conservatives over his comments about Charlie Kirk’s assassination. President Donald Trump, who had called for Kimmel’s ouster at that time, called ABC’s decision “great news for America.” The host has been reinstated since then.

Morgan Stanley expects flat performance for Disney+ subscriptions, compared with the modest sequential growth the company forecasted when it announced its third-quarter results in early August.

Disney had said then that Disney+ and Hulu subscriptions would increase by 10 million sequentially, anticipating a big contribution from Hulu following its expanded Charter deal. The company will stop reporting subscriber numbers for its namesake streaming services from the new fiscal year.

Morgan Stanley expects Disney to end the fiscal year 2025 with adjusted earnings per share growth of over 20%. During the quarter, Disney named DraftKings as its official sportsbook and odds provider. 

Disney Outlook

Morgan Stanley analyst Benjamin Swinburne expects the standoff with YouTube TV over the terms of their distribution deal to affect adjusted EPS by $0.02 per week. The analyst, however, expects the two sides to resolve the issue later this week. Swinburne’s base-case scenario assumes low-to-mid-teens growth in adjusted EPS for the fiscal years 2026 and 2027. 

The analyst also expressed optimism about the company’s upcoming holiday releases, including “Zootopia 2” and “Avatar: Fire and Ash”. He also expects the company to announce its next CEO in the upcoming fiscal year, who will likely set the strategy for driving growth through the end of the decade and beyond.

What Retail Traders Feel About Disney Stock Ahead Of Q4

Retail sentiment among users of the Stocktwits platform was ‘extremely bullish’ going into the earnings report, improving from the ‘bullish’ mood seen a day ago. The message volume on the stream increased to ‘extremely high’ levels.

A bullish watcher predicted the stock would climb to $125 within a few trading days.

Another user braced for a solid earnings beat and said that, together with the end of the government shutdown, this would be healthy for the stock.

What Wall Street Feels About DIS Stock

Morgan Stanley has an ‘Overweight’ rating and a $140 price target for Disney shares. The firm noted that the stock is trading at 16 times price-earnings (P/E) multiple, below its historical range, the broader market, and most lodging and cruise stocks.

According to the firm, the key to driving multiple expansions is to show durable growth at the Experiences business and accelerated growth in streaming. The firm believes that the company’s “portfolio of iconic brands and franchises can be monetized at a level that delivers double-digit compounding earnings growth for years to come.”

The average price target for the stock is $134.22, according to Koyfin. This implies rougly 15% upside from Wednesday’s closing price. Of the 31 analysts covering the stock, 24 have either ‘Buy’ or ‘Strong Buy’ ratings, six rate the stock as ‘Hold’, and one has a ‘Sell’ rating.

Disney stock has traded in a 52-week range of $80.10 to $124.69. The short interest in the stock is 1.10%

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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