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Walt Disney (DIS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3-min read

Walt Disney (DIS) closed at $100.80 in the latest trading session, marking a -0.63% move from the prior day. This move lagged the S&P 500's daily loss of 0.2%. Meanwhile, the Dow lost 0.14%, and the Nasdaq, a tech-heavy index, lost 0.12%.

Heading into today, shares of the entertainment company had lost 7.86% over the past month, lagging the Consumer Discretionary sector's loss of 6.57% and the S&P 500's loss of 3.29% in that time.

Investors will be hoping for strength from Walt Disney as it approaches its next earnings release, which is expected to be November 8, 2022. In that report, analysts expect Walt Disney to post earnings of $0.59 per share. This would mark year-over-year growth of 59.46%. Meanwhile, our latest consensus estimate is calling for revenue of $21.41 billion, up 15.54% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for Walt Disney. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Walt Disney is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Walt Disney is currently trading at a Forward P/E ratio of 19.71. For comparison, its industry has an average Forward P/E of 19.3, which means Walt Disney is trading at a premium to the group.

It is also worth noting that DIS currently has a PEG ratio of 0.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DIS's industry had an average PEG ratio of 1.08 as of yesterday's close.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 65, which puts it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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