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Walt Disney (DIS) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Twin Disc (TWIN) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Walt Disney (DIS) closed the most recent trading day at $111.62, moving +1.67% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.78%. At the same time, the Dow added 0.95%, and the tech-heavy Nasdaq gained 0.98%.

Coming into today, shares of the entertainment company had lost 1.92% in the past month. In that same time, the Consumer Discretionary sector gained 3.19%, while the S&P 500 gained 2.17%.

DIS will be looking to display strength as it nears its next earnings release, which is expected to be November 8, 2018. The company is expected to report EPS of $1.31, up 22.43% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $13.81 billion, up 8.05% from the year-ago period.

DIS's full-year Zacks Consensus Estimates are calling for earnings of $6.92 per share and revenue of $58.86 billion. These results would represent year-over-year changes of +21.4% and +6.75%, respectively.

It is also important to note the recent changes to analyst estimates for DIS. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.1% lower. DIS currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, DIS is holding a Forward P/E ratio of 15.87. For comparison, its industry has an average Forward P/E of 15.87, which means DIS is trading at a no noticeable deviation to the group.

We can also see that DIS currently has a PEG ratio of 1.45. 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 1.3 as of yesterday's close.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 191, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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