U.S. Markets closed

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

Zacks Equity Research

Walt Disney (DIS) closed at $145.65 in the latest trading session, marking a -0.58% move from the prior day. This change lagged the S&P 500's 0.35% gain on the day. Elsewhere, the Dow gained 0.24%, while the tech-heavy Nasdaq added 0.56%.

Heading into today, shares of the entertainment company had lost 0.64% over the past month, lagging the Consumer Discretionary sector's gain of 5.72% and the S&P 500's gain of 4.69% in that time.

Wall Street will be looking for positivity from DIS as it approaches its next earnings report date. On that day, DIS is projected to report earnings of $1.48 per share, which would represent a year-over-year decline of 19.57%. Meanwhile, our latest consensus estimate is calling for revenue of $21.14 billion, up 38.15% from the prior-year quarter.

DIS's full-year Zacks Consensus Estimates are calling for earnings of $5.35 per share and revenue of $81.50 billion. These results would represent year-over-year changes of -7.28% and +17.14%, 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 4.58% lower. DIS is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, DIS currently has a Forward P/E ratio of 27.38. For comparison, its industry has an average Forward P/E of 19.65, which means DIS is trading at a premium to the group.

It is also worth noting that DIS currently has a PEG ratio of 5.75. 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 was holding an average PEG ratio of 5.75 at yesterday's closing price.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 38% 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.

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