Disney Beats Earnings Expectations but Faces Negative Cash Flow
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy DIS?
Source: seekingalpha
- Strong Earnings but Tepid Market Reaction: Disney reported $26 billion in revenue and adjusted EPS of $1.63, surpassing analyst expectations; however, the stock fell over 7% due to a lukewarm Q2 forecast and a negative $2.28 billion in free cash flow.
- Leadership Changes Raise Questions: The appointment of Josh D’Amaro as CEO and Dana Walden as President and Chief Creative Officer aims to centralize creative authority and revitalize the content engine, though market reactions have been mixed regarding this strategic shift.
- Streaming Business Shows Significant Growth: The streaming segment's operating income grew 72% year-over-year, indicating a positive inflection point, yet the ongoing decline of linear networks poses challenges, highlighting the dual nature of opportunities and risks in the company's transformation.
- Future Outlook and Shareholder Returns: Despite short-term headwinds, Disney reaffirmed its double-digit adjusted EPS growth target for FY2026 and plans to return approximately $9.7 billion to shareholders through $7 billion in stock buybacks and $2.7 billion in dividends, reflecting confidence in its long-term strategy.
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Analyst Views on DIS
Wall Street analysts forecast DIS stock price to rise
19 Analyst Rating
16 Buy
3 Hold
0 Sell
Strong Buy
Current: 102.380
Low
123.00
Averages
137.29
High
152.00
Current: 102.380
Low
123.00
Averages
137.29
High
152.00
About DIS
The Walt Disney Company is a diversified worldwide entertainment company. The Company's segments include Entertainment, Sports and Experiences. The Entertainment segment generally encompasses its non-sports focused global film and episodic content production and distribution activities. The lines of business within the Entertainment segment along with their business activities include Linear Networks, Direct-to-Consumer, and Content Sales/Licensing. The Sports segment encompasses its sports-focused global television and direct-to-consumer (DTC) video streaming content production and distribution activities. The lines of business within the Sports segment include ESPN and Star. The Experiences segment includes Parks and Experiences and Consumer Products. Parks and Experiences consists of Walt Disney World Resort in Florida, Disneyland Resort in California, Disney Cruise Line, and others. Consumer Products includes licensing of its trade names, characters, visual, literary and other IP.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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