On Wednesday, Piper Sandler began covering Walt disney The company’s (NYSE:NYSE:) shares have a Neutral rating and set a price target of $95.00. The firm’s analysis pointed to limited projected improvement for Disney’s financial estimates in the coming quarters, primarily due to the expected continued moderation in the company’s experiences segment.
The coverage report highlighted concerns about a consumer-related slowdown in Disney’s parks business, which is expected to continue to impact the company’s performance for several more quarters. With the experiences segment accounting for approximately 40% of the segment’s operating income, Piper Sandler does not anticipate significant gains in the near term.
Despite these near-term challenges, the firm recognized the strength of what it called the “Disney steering wheel” and the company’s unparalleled portfolio of industrial assets, especially after recent successes in film production. Additionally, the report noted that Disney’s direct-to-consumer (DTC) business has achieved profitability through effective cost management strategies.
However, Piper Sandler expressed a need for more details on the timeline for Disney’s next phase of margin growth, specifically targeting double-digit targets. The company indicated it preferred evidence of stability in Disney’s experiences business before taking a more positive stance on the company’s stock.
In other recent news, the Walt Disney Company has been the focus of important events. Goldman Sachs reaffirmed its Buy rating on Disney, projecting a hit of between $150 million and $200 million to the Parks and Experiences segment’s EBIT for the fiscal first quarter of 2025 due to Hurricane Milton. However, the company still anticipates that Disney will report earnings per share of $1.16 in the fiscal fourth quarter of 2024.
In the Philippines, a newly introduced 12% value-added tax on digital services offered by international technology companies, including Disney, is expected to generate around $1.9 billion between 2025 and 2029. Charter communications (NASDAQ:) plans to include NBCUniversal’s Peacock streaming service in its Spectrum TV Select package, complementing its existing offerings like Disney+.
Meanwhile, Raymond James downgraded Disney stock from Outperform to Market Perform over concerns about the near-term outlook for Disney’s parks segment. Despite this, BofA Securities maintained a Buy rating on Disney, emphasizing its strong portfolio and growth potential.
Finally, JPMorgan revised Disney’s earnings per share estimate to $1.09, primarily due to lower expected revenue at Linear Networks and Sports. However, Goldman Sachs continues to express confidence in Disney’s financial performance and predicts that the company will beat earnings per share expectations for the fourth quarter of 2024, largely due to strong performance in its direct-to-consumer segment.
InvestingPro Insights
Adding to Piper Sandler’s analysis, recent data from InvestingPro provides additional context to Disney’s financial picture. The company’s market capitalization amounts to $171.1 billion, reflecting its significant presence in the entertainment industry. Disney’s P/E ratio of 35.9 suggests a premium valuation, which aligns with Piper Sandler’s cautious outlook on near-term upside potential.
InvestingPro Tips highlights that Disney is expected to see net income growth this year and analysts predict the company will remain profitable. This positive outlook on profitability supports the company’s recognition of Disney’s strong asset portfolio and recent successes in film production.
However, InvestingPro data also reveals that Disney’s trailing-twelve-month revenue growth was modest at 2.53%, which may contribute to concerns about the consumer-related slowdown mentioned in the report. Piper Sandler. This slower growth could have a particular impact on the experiences segment, which analysts identified as a key area of focus.
For investors looking for a more comprehensive analysis, InvestingPro offers additional information with 9 more tips available for Disney, providing a deeper understanding of the company’s financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information consult our T&C.