Disney expects analysts to be optimistic ahead of its fiscal second-quarter earnings report

Walt Disney Co (NYSE:DIS, ETR:WDP) will report fiscal second-quarter earnings before the market opens on Tuesday, May 7, and analysts believe the company is seeing year-over-year earnings and earnings growth.

The amusement and theme park giant is expected to report revenue of $22.11 billion, up 1.3% year-over-year.

Earnings per share are expected to be $1.11, up nearly 20% from $0.93 in the year-ago quarter.

Bank of America analysts raised their price target for Disney ahead of earnings, expecting strong momentum to continue in the fiscal second quarter.

They raised their price target from $130 to $145 and reiterated their “Buy” rating on the stock.

Disney shares were up 2.6% on Monday afternoon, trading at around $116.

In the second quarter of the fiscal year, analysts emphasized that parks’ performance remains solid, with operating income growing in the low-to-mid range. They forecast operating income of $3.7 billion.

As for the Disney+ streaming platform, analysts expect to add 7.5 million domestic subscribers, with a loss of 1.5 million international subscribers due to price increases.

“The company appears to be on track to exceed $7.5 billion in savings and is confident that direct-to-consumer sales will achieve profitability in the fiscal fourth quarter,” they wrote.

“This, combined with the apparently improving film market, provides a positive free cash flow trajectory as well as capital returns and positions the company well to maintain its strong year-to-date equity performance.”

Analysts stressed that since returning as CEO in November 2022, Bob Iger “appears to be in command and leading the growth offensive.”

“Having spent the past year restructuring the company, we are now focused on the multiple growth drivers for the company, including generating strong free cash flow, with Disney on track to exceed fiscal year 2024 guidance of $8 billion; continued momentum in retail parks and experience of year-on-year operating income growth in the second quarter of the financial year, trending upwards in the low to mid-teens; improved film disc; and increased confidence in the profitability of direct sales by the fourth quarter,” they wrote.

“Disney’s ability to meet and exceed these goals will continue to be a factor in share performance over the medium term.”