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Walt Disney (DIS) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Walt Disney (DIS) closed at $179.12, marking a +0.38% move from the previous day. The stock lagged the S&P 500's daily gain of 0.57%. At the same time, the Dow added 1.44%, and the tech-heavy Nasdaq lost 0.61%.

Coming into today, shares of the entertainment company had gained 16.08% in the past month. In that same time, the Consumer Discretionary sector gained 2.39%, while the S&P 500 gained 0.83%.

DIS will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of -$0.21, down 113.73% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $16.23 billion, down 22.2% from the year-ago period.

DIS's full-year Zacks Consensus Estimates are calling for earnings of $2.05 per share and revenue of $69.62 billion. These results would represent year-over-year changes of +1.49% and +6.52%, respectively.

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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 12.9% lower within the past month. DIS is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, DIS currently has a Forward P/E ratio of 87.12. For comparison, its industry has an average Forward P/E of 51.44, which means DIS is trading at a premium to the group.

We can also see that DIS currently has a PEG ratio of 4.49. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Media Conglomerates industry currently had an average PEG ratio of 4.49 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 222, which puts it in the bottom 13% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DIS in the coming trading sessions, be sure to utilize Zacks.com.


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