TLDR:
- Disney will report Q2 fiscal 2025 earnings on May 7, with analysts expecting EPS of $1.19-1.21 on revenue of $23.09-23.17 billion
- The stock has declined about 17% year-to-date due to weak box office returns and other challenges
- Disney has missed Wall Street’s revenue estimates four times over the last two years
- Loop Capital analyst Alan Gould lowered price target to $120 from $130 while maintaining a Buy rating
- Wall Street has a Strong Buy consensus rating with an average price target of $125.57, suggesting 36.33% upside potential
Disney is set to report its second-quarter fiscal 2025 earnings tomorrow, May 7, before the market opens. Wall Street analysts expect the entertainment giant to post earnings per share between $1.19 and $1.21, with revenue projected to reach $23.09-23.17 billion.
This represents a revenue growth of approximately 4.9% year-over-year, improving from the 1.2% increase recorded in the same quarter last year.
The company has faced challenges in 2025, with its stock declining about 17% year-to-date. This downturn has been attributed to several factors including weak box office returns, concerns over streaming growth, and potential tariffs on international productions.
Broader economic uncertainty has also affected theme park attendance and advertising revenues across Disney’s various media platforms.
Despite these headwinds, Disney has maintained a strong track record with earnings. The company has missed earnings estimates only once in the previous nine quarters, demonstrating consistent performance against analyst expectations.
In its last earnings report, Disney met revenue expectations with $24.69 billion, up 4.8% year-on-year. The quarter was particularly strong, featuring an impressive beat on adjusted operating income estimates and a solid beat on EPS projections.
Wall Street Remains Optimistic
Loop Capital analyst Alan Gould recently adjusted his outlook on Disney. He lowered his price target from $130 to $120 but maintained a Buy rating on the stock.
Gould expects Disney’s Parks and Experiences segment to underperform consensus estimates. He even projects results might come in slightly below management’s low-end guidance for the division.
According to data from Main Street Data, Disney’s Parks and Experiences segment reported $9.4 billion in revenue for the quarter ending December 28, 2024. This represented a 3% increase year-over-year.
Gould also reduced his March quarter film revenue forecast, citing “disappointing results of Snow White” at the box office. The film underperformed expectations, creating downward pressure on the studio entertainment segment.
However, the analyst remains positive about Disney’s content outlook. He highlighted a strong 15-month lineup that includes new installments in the Avatar and Avengers franchises, both expected to be major box office drivers.
Options traders are positioning for volatility following the earnings announcement. Using TipRanks’ Options tool, current data suggests traders expect a 7.09% move in either direction after the results are published.
This expected movement reflects market uncertainty about Disney’s performance and forward guidance in the current economic climate.
The broader Wall Street sentiment remains strongly positive on Disney stock. Analysts have assigned a Strong Buy consensus rating based on 14 unanimous Buy recommendations in the past three months.
The average price target stands at $125.57, suggesting a potential upside of 36.33% from current levels around $92.30.
In the consumer discretionary segment, Disney’s peers have shown mixed results in their recent earnings reports. fuboTV reported revenue growth of 3.5%, missing analysts’ expectations by 28.7%. In contrast, Hasbro delivered 17.1% revenue growth, exceeding estimates by 14.8%.
These varied outcomes reflect the challenging environment facing consumer discretionary companies as they navigate economic pressures and changing consumer behaviors.
Investors will be watching closely for Disney’s performance across its key business segments, particularly the Parks and Experiences division and its streaming services, which have been focal points for growth.
The company’s guidance for upcoming quarters will also be crucial as it continues to navigate the post-pandemic landscape and shifting entertainment consumption patterns.
Disney will report its Q2 fiscal 2025 results before market open on May 7, with the conference call scheduled to follow the announcement.
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