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

Zacks Equity Research

Walt Disney (DIS) closed at $138.33 in the latest trading session, marking a +1.79% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.01%. Elsewhere, the Dow gained 0.66%, while the tech-heavy Nasdaq added 1.43%.

Coming into today, shares of the entertainment company had lost 5.47% in the past month. In that same time, the Consumer Discretionary sector lost 3.15%, while the S&P 500 gained 0.19%.

Wall Street will be looking for positivity from DIS as it approaches its next earnings report date. This is expected to be February 4, 2020. The company is expected to report EPS of $1.43, down 22.28% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $21.08 billion, up 37.74% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.40 per share and revenue of $81.87 billion, which would represent changes of -6.41% and +17.68%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DIS. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 0.84% higher. DIS is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, DIS currently has a Forward P/E ratio of 25.18. This represents a premium compared to its industry's average Forward P/E of 19.16.

Also, we should mention that DIS has a PEG ratio of 4.98. 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 4.98 as of yesterday's close.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 11, putting it in the top 5% 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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