Disney reported positive progress towards streaming profits in its quarterly earnings report and conference call with management, leading to an increased full-year earnings forecast. Despite this good news, Disney’s shares dropped around 10 percent on Tuesday, marking one of the stock’s worst days in the past year.
The company is facing near-term challenges, particularly at its theme parks, and a global moderation in post-COVID travel demand. While many analysts praised Disney for narrowing its streaming loss and reaching profitability in certain areas, some expressed caution.
Bank of America analyst Jessica Reif Ehrlich maintained a “buy” rating and $145 price target, while CFRA Research analyst Kenneth Leon cut his rating to “hold” and slashed his price target. UBS analyst John Hodulik kept a “buy” rating and $140 price target on Disney shares, highlighting mixed trends. Wolfe Research analyst Peter Supino noted better results in some areas but softer performance in others.
Third Bridge analyst Jamie Lumley pointed out Disney’s progress towards streaming profitability but also highlighted challenges like goodwill impairments in India and ongoing cord-cutting pressure. Lumley also mentioned uncertainty around succession planning for Disney’s CEO role.
Overall, Disney’s quarterly results and outlook reflect a mix of positive developments and challenges that could impact the company’s future performance. Despite the drop in shares, analysts remain cautiously optimistic about Disney’s long-term prospects.
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