- Goldman Sachs (GS) maintains a ‘Buy’ rating on Walt Disney (DIS) with a $140 price target, forecasting Q2 2025 EPS at $1.18, revenue at $23.1 billion, and EBIT at $3.94 billion, slightly below consensus estimates.
- Disney’s DTC segment is expected to grow due to theatrical releases, SC+ streaming, and October 2024 price increases, while the Experiences division benefits from the Disney Treasure cruise launch on December 21, 2024, despite $40 million in pre-launch costs.
- The Sports segment faces a $150 million expense hike this quarter, but Goldman Sachs raises EBIT forecasts for 2026 and 2027, reflecting the non-renewal of MLB rights after 2025, amid Disney’s $92.5 billion annual revenue and 36.7% gross profit margin.
Goldman Sachs (GS) has reaffirmed its ‘Buy’ rating on Walt Disney shares (DIS) with a $140 price target, signaling confidence in the entertainment giant’s trajectory as it approaches its second fiscal quarter of 2025. The firm projects an Earnings Per Share (EPS) of $1.18, just shy of the Visible Alpha consensus of $1.21, alongside revenues of $23.1 billion – nearly matching the $23.2 billion expected – and an Earnings Before Interest and Taxes (EBIT) of $3.94 billion, falling short of the $4.14 billion consensus. These figures come against the backdrop of Disney’s robust $92.5 billion in revenue over the past twelve months, underpinned by a 36.7% gross profit margin, highlighting the company’s financial resilience even as it navigates a complex quarter.
Disney’s Direct-to-Consumer (DTC) segment is poised to drive growth, fueled by strong theatrical releases, the streaming platform SC+, and strategic promotions, with the full effect of October 2024 price hikes boosting results. Meanwhile, the Experiences division anticipates a lift from the Disney Treasure cruise ship’s inaugural voyage on December 21, 2024, despite $40 million in pre-launch costs, though domestic theme park attendance has dipped slightly year-over-year due to the Easter holiday shift. Looking ahead, summer bookings show promise, undeterred by soft travel trends and the looming challenge of Epic Universe, reflecting Disney’s enduring appeal in the leisure market.
The Sports segment, however, faces a $150 million expense increase this quarter, with $100 million tied to the timing of sports costs and a $50 million write-off from the Venu venture, though Goldman Sachs sees a brighter outlook beyond 2025, slightly raising EBIT forecasts for 2026 and 2027 due to the non-renewal of MLB rights. This adjustment underscores a strategic recalibration in Disney’s sports broadcasting portfolio, balancing short-term pressures with long-term gains. With $23.1 billion in projected revenue and a diversified business model spanning streaming, cruises, and live sports, Disney remains a formidable player, justifying Goldman’s optimistic stance as it adapts to shifting market dynamics.
Price Action: At last check, Disney’s shares were down 0.87%, trading at $100.73 during Wednesday’s early session. The $183.7 billion market cap company has seen its stock decline nearly 10% year-to-date and 17% over the past year.
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