Disney: How Investors Can Unlock Growth on Stock After Its ‘Magic Is Back’

In a strong financial showing, The Walt Disney Company (NYSE:) surpassed Wall Street’s expectations in its fourth-quarter earnings report. The entertainment giant reported an adjusted earnings per share (EPS) of $1.14, slightly exceeding the anticipated $1.10. Revenue also outpaced forecasts, coming in at $22.6 billion against the expected $22.45 billion.

The company’s operating income saw a significant boost, rising 23% to nearly $3.7 billion, marking a period of strong financial health and operational efficiency. At the time of writing, the company’s stock was up 10.2% over the trading day.

Disney Stock Jumps on Earnings Beat, Hits 6-Month High

Disney’s stock price experienced a notable surge following the earnings announcement, jumping 10.2% to $113.17, the highest level in six months. This rise reflects investor confidence in Disney’s financial trajectory and strategic initiatives.

The stock opened at $110.33 on November 14, 2024, after closing at $102.72 the previous day, highlighting a positive market response. Throughout the trading day, the stock fluctuated between a low of $110.02 and a high of $114.8. The current price as of mid-morning trading stands at $110.115, indicating sustained investor interest and market activity.

The company’s financial metrics further illustrate its solid market position. Disney’s market capitalization is approximately $199.70 billion, with a trailing P/E ratio of 42.19 and a forward P/E ratio of 19.27, suggesting expectations of strong future earnings growth. The stock’s beta of 1.398 reflects its relative volatility compared to the market.

Additionally, Disney’s forward EPS is projected at $5.15, reinforcing its growth potential. Analysts have set a target mean price of $110.67, with a high target of $133.00, supporting a consensus recommendation to buy.

‘The Magic is Back at Disney’ as Outlook Looks Bullish

Disney’s success is driven by several key factors, including the impressive performance of its streaming services, which have turned profitable for two consecutive quarters.

The company added six million new streaming subscribers in the third quarter, contributing to an operating profit of $321 million from this segment. Disney’s film division also contributed significantly, with blockbuster hits like “Deadpool & Wolverine” and “Inside Out 2” bolstering box office revenues. Moreover, Disney’s experiences business reported a record year, further diversifying its revenue streams and enhancing its financial stability.

Looking ahead, Disney remains optimistic about its growth prospects through 2027, with high single-digit EPS growth projected for fiscal 2025 and double-digit growth anticipated for 2026 and 2027.

The company plans a $3 billion share buyback, reflecting confidence in its financial health and future performance. Executives emphasize a strategic focus on quality content and have expressed no immediate need for further media consolidation.

As Disney continues to invest in its theme parks, cruise ships, and streaming services, it positions itself for sustained growth and shareholder value creation, reinforcing the sentiment that “the magic is back at Disney,” as noted by CFO Hugh Johnston.

***

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

This article was originally published on The Tokenist. Check out The Tokenist’s free newsletter, Five Minute Finance, for weekly analysis of the biggest trends in finance and technology.