Walt Disney (DIS) stock is down Wednesday even though the entertainment and media company beat top- and bottom-line expectations for its fiscal 2025 first quarter and reiterated its full-year outlook.
In the quarter ending December 28, Disney's revenue increased 4.8% year over year to $24.7 billion, led by 8.9% growth in its Entertainment segment to $10.9 billion. Earnings per share (EPS) rose 44.3% from the year-ago period to $1.76.
"Our results this quarter demonstrate Disney's creative and financial strength as we advanced the strategic initiatives set in motion over the past two years," said CEO Bob Iger in a statement.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Iger cited "outstanding box office performance" during the quarter, including the top three movies of 2024, and improved profitability of Disney's Entertainment direct-to-consumer (DTC) streaming businesses.
Indeed, it's the first time Disney has reported a first-quarter profit for its direct-to-consumer segment. And fewer subscribers left than anticipated following a price increase in October.
The CEO also noted "an important step to advance ESPN's digital strategy by adding an ESPN tile on Disney+" and strategic investments in the "enduring appeal" of Disney's Experiences segment.
The results topped analysts' expectations. Wall Street was anticipating revenue of $24.6 billion and earnings of $1.45 per share, according to CNBC.
Disney ended the first quarter with 124.6 million Disney+ subscribers, down from 125.3 million at the end of the fourth quarter, and 53.6 million Hulu subscribers, up from 52 million.
Disney's reiterated outlook for 2025 calls for high-single digit EPS growth compared to 2024.
"Overall, this quarter proved to be a strong start to the fiscal year," Iger added, "and we remain confident in our strategy for continued growth."
Is Disney stock a buy, sell or hold?
Disney stock continues to recover after a rough patch during the middle of 2024 and has outperformed the S&P 500 with a 27% gain vs 14% for the index over the trailing six months. And Wall Street is bullish on the Dow Jones stock.
According to S&P Global Market Intelligence, the average analyst target price for DIS stock is $124.56, representing implied upside of more than 10% to current levels. And the consensus recommendation is a Buy.
Financial services firm BofA Securities is one of the most bullish outfits on the blue chip stock with a Buy rating and $140 price target.
"DIS reported a solid fiscal first quarter with operating income coming in above our expectations while revenue was modestly below," writes BofA Securities analyst Jessica Reif Ehrlich in a note this morning.
According to Ehrlich, near-term catalysts for Disney include a profitability inflection in DTC and a reacceleration in the Parks business as well as a strong film slate that drives growth across DTC, Parks and Consumer Products.
Related Content
-
Stock Market Today: Stocks Rise on Less Deadly ConcernsMarkets are forward-looking mechanisms, and it's good when price action shows there's a future to look forward to.
-
How the Federal Reserve Affects Mortgage Rates — and What It Means for Homebuyers in 2025Mortgage rates are still fluctuating in 2025 as the Fed holds steady — for now. Learn how interest rate changes affect your monthly payments and what buyers should watch for this year.
-
Stock Market Today: Stocks Rise on Less Deadly Concerns
Markets are forward-looking mechanisms, and it's good when price action shows there's a future to look forward to.
-
Who Will Replace Jerome Powell as Fed Chair?Even if President Trump doesn't make good on threats to fire Chair Powell, the Fed leader's term ends in 2026.
-
If You're Ignoring Private Markets, You're Missing Most of the ActionPrivate markets are becoming increasingly essential for all investors, not just institutions, and they are now more easily accessible thanks to innovative investment structures.
-
Three Ways Women Can Keep Caregiving From Draining Them FinanciallyMany women care for older relatives. While commendable, it could put their retirement at risk … unless they find a way to prioritize themselves.
-
How Our Favorite ETFs Are Performing Amid Market VolatilityA roller-coaster year for the stock market has weighed on several of our favorite ETFs, but one equities fund is faring better than others. Here's why.
-
I'm a Financial Professional: This Is the Roth Conversion Mistake Too Many People MakeConverting your traditional IRA to a Roth can be a fantastic tax-saving move, but you've got to be smart about two things: how much and when.
-
The Overlooked Generation: An Expert's Guide to How Gen X Can Finally Get AheadA perfect financial storm has been lashing this generation for years, but they still have time to get their retirement back on track with a few key moves.
-
Financial Advice and Retirement Confidence: What's Wealth Got to Do With It?This retirement researcher notes that retirement confidence increases the most for those with access to advice who have a lower total level of savings.
