Disney (DIS) is gearing up to report its second-quarter earnings on Tuesday, with analysts closely watching the performance of its various divisions. Despite concerns about streaming and the ongoing impact of the pandemic on theme park traffic, two analysts have raised their price targets for Disney stock.
Deutsche Bank raised its price target to $130 from $125, citing improved performance in theme parks, sports, and studios. However, the firm expects growth to be offset by lower numbers in the direct-to-consumer segment. Loop Capital also increased its target to $140 from $113, highlighting improved consumer confidence and signs of a turnaround in Disney’s film division.
While analysts anticipate a slowdown in earnings growth for the second consecutive quarter, they expect Disney+ subscribership to continue growing. However, total streaming subscribership, including Hulu and ESPN+, is forecasted to decline slightly compared to the previous year.
On the business front, Disney is in talks with Kroger to offer Disney+ to members of its Kroger Boost delivery program. Additionally, negotiations are underway to renew the NBA deal, with Disney expected to pay a higher fee. Meanwhile, Amazon Prime recently secured a major streaming deal for NBA games starting from the 2025-2026 season.
In April, Disney settled a proxy board battle with Trian Fund Management and Blackwells Capital, paving the way for additional theme park development in Florida. The company plans to invest $17 billion in Florida over the next decade as part of its larger spending plan to upgrade its theme parks.
Despite recent challenges, Disney stock remains a top performer on the Dow Jones Industrial Average, up 29% in 2024. As the company navigates through various challenges, including streaming competition and recovery from the pandemic, investors eagerly await the earnings report for insights into Disney’s future prospects.
