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

Zacks Equity Research

Walt Disney (DIS) closed at $143.76 in the latest trading session, marking a -0.59% move from the prior day. This move lagged the S&P 500's daily gain of 0.7%. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, added 1.04%.

Heading into today, shares of the entertainment company had lost 2.13% over the past month, lagging the Consumer Discretionary sector's gain of 4.48% and the S&P 500's gain of 4.38% 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 $1.48 per share. This would mark a year-over-year decline of 19.57%. Our most recent consensus estimate is calling for quarterly revenue of $21.14 billion, up 38.15% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.35 per share and revenue of $81.50 billion, which would represent changes of -7.28% and +17.14%, respectively, from the prior year.

Any recent changes to analyst estimates for DIS should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 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 4.63% lower within the past month. DIS is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, DIS currently has a Forward P/E ratio of 27.02. This valuation marks a premium compared to its industry's average Forward P/E of 19.33.

Also, we should mention that DIS has a PEG ratio of 5.68. 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. The Media Conglomerates industry currently had an average PEG ratio of 5.68 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 111, which puts it in the top 44% 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.

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


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