U.S. Markets open in 3 hrs 17 mins

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

Zacks Equity Research

In the latest trading session, Walt Disney (DIS) closed at $144.02, marking a +0.32% move from the previous day. This change outpaced the S&P 500's 0.03% gain on the day. Elsewhere, the Dow lost 0.03%, while the tech-heavy Nasdaq added 0.14%.

Prior to today's trading, shares of the entertainment company had lost 1.19% over the past month. This has lagged the Consumer Discretionary sector's gain of 1.39% and the S&P 500's gain of 3.23% in that time.

Investors will be hoping for strength from DIS as it approaches its next earnings release, which is expected to be February 4, 2020. In that report, analysts expect DIS to post earnings of $1.46 per share. This would mark a year-over-year decline of 20.65%. Our most recent consensus estimate is calling for quarterly revenue of $21.08 billion, up 37.74% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.34 per share and revenue of $81.45 billion. These totals would mark changes of -7.45% and +17.08%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DIS. Recent revisions tend to reflect the latest near-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. 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 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 0.19% lower. DIS currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, DIS is currently trading at a Forward P/E ratio of 26.88. For comparison, its industry has an average Forward P/E of 19.98, which means DIS is trading at a premium to the group.

It is also worth noting that DIS currently has a PEG ratio of 5.65. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Media Conglomerates stocks are, on average, holding a PEG ratio of 5.65 based on yesterday's closing prices.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 247, which puts it in the bottom 4% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The Walt Disney Company (DIS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.