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Walt Disney (DIS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Walt Disney (DIS) closed at $128.42, marking a -1.89% move from the previous day. This change lagged the S&P 500's 1.56% loss on the day. Meanwhile, the Dow lost 1.19%, and the Nasdaq, a tech-heavy index, lost 1.67%.

Coming into today, shares of the entertainment company had lost 5.71% in the past month. In that same time, the Consumer Discretionary sector lost 3.72%, while the S&P 500 lost 1.22%.

Investors will be hoping for strength from DIS as it approaches its next earnings release, which is expected to be November 7, 2019. In that report, analysts expect DIS to post earnings of $0.97 per share. This would mark a year-over-year decline of 34.46%. Meanwhile, our latest consensus estimate is calling for revenue of $18.91 billion, up 32.16% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for DIS. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.94% lower. DIS currently has a Zacks Rank of #5 (Strong Sell).

Investors should also note DIS's current valuation metrics, including its Forward P/E ratio of 21.71. This represents a premium compared to its industry's average Forward P/E of 12.13.

We can also see that DIS currently has a PEG ratio of 4.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Media Conglomerates industry currently had an average PEG ratio of 2.54 as of yesterday's close.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 234, which puts it in the bottom 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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