Disney raised its streaming prices on Tuesday just before reporting Q3 results on Wednesday. The company is also celebrating its first Marvel Cinematic Universe box-office hit in years and has renewed its NBA partnership, launching a new sports streaming service this fall. Despite these developments, Disney's stock declined on Wednesday.
DIS stock opened at $86.21 on Thursday. The company has a debt-to-equity ratio of 0.38, a current ratio of 0.75 and a quick ratio of 0.69. The company’s 50 day simple moving average is $96.90 and its 200-day simple moving average is $105.13. Walt Disney has a 12 month low of $78.73 and a 12 month high of $123.74. The firm has a market capitalization of $157.16 billion, a PE ratio of 93.71, a P/E/G ratio of 1.15 and a beta of 1.40.
Raising its full-year EPS guidance, Disney now expects earnings to grow 30% in fiscal 2024 compared to previous targets of 25% growth. This is slightly above the current Zacks Consensus of $4.86 per share or 29% growth.
Trading around $85, Disney’s stock trades at 18X forward earnings and at a noticeable discount to the S&P 500’s 22.4X and Netflix’s 33X. More intriguing, DIS trades well below its decade-long high of 134.4X forward earnings and at a 15% discount to the median of 21.3X.
On Tuesday, Disney (DIS) revealed plans to increase subscription prices for its streaming services. Beginning October 17, the basic Disney+ plan will rise from $7.99 to $9.99 per month, while the ad-free version will increase by $2 to $15.99 per month. Hulu with ads will see a $2 price hike to $9.99 per month, and the ad-free Hulu plan will increase from $17.99 to $18.99 per month.
ESPN+ will also experience a $1 increase, bringing its monthly fee to $11.99. The cost of the basic Disney+ and Hulu bundle will rise by $1 to $10.99 per month, though the ad-free bundle will remain at $19.99 per month.
For Hulu + Live TV, the ad-supported plan will increase to $82.99 per month from $76.99, while the ad-free version will go up to $95.99 per month from $89.99.
Earlier on July 25, Disney announced a new bundle with Warner Bros. Discovery, combining Disney+, Hulu, and Max. The basic bundle with ads is priced at $16.99 per month, while the ad-free version costs $29.99 per month. This bundle offers a 38% discount compared to buying the services individually.
With 154 million subscribers, the flagship Disney+ service looks like it's already one of the winners in the global streaming wars. And with the planned launch of a stand-alone ESPN streaming app in 2025, it's hard to envision a world in which Disney doesn't attract more subscribers.
Revenue in the Experiences segment increased by just 2% year-over-year, reflecting a slowdown in both attendance and guest spending internationally, which now mirrors the domestic trend seen over the past year after a period of rapid post-pandemic growth. Additionally, operating income in this segment decreased by 3% due to a 150 basis point contraction in margins. Management anticipates these modest results to continue for several quarters, noting a decline in consumer demand. They cited rising expenses, including startup costs for new projects, as contributing factors. Despite these short-term challenges, demand is expected to be cyclical, and with new cruise ships and park expansions planned in the coming years, there is optimism for long-term growth potential.
Disney is gaining momentum after reporting stronger-than-expected financial results for fiscal Q3 2024, which ended June 29. Revenue hit $23.2 billion, up 4% from the previous year, with 2% growth in Experiences and 4% in Entertainment. Adjusted earnings per share (EPS) jumped 35%, and Disney is committed to cutting $7.5 billion in expenses. CFO Hugh Johnston emphasized aggressive cost-saving measures and continued investment in growth opportunities. The company also increased its full-year EPS guidance, projecting a 30% rise compared to fiscal 2023.
Combined, all of Disney's streaming properties -- which include Disney+, Hulu, and ESPN+ -- reported operating income of $47 million, a big improvement from the $512 million loss in the year-ago period. This was boosted by a revenue jump of 15%.
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