Morgan Stanley, which has kept its Overweight recommendation on Walt Disney (NYSE:DIS), says that the company could grow its earnings by 20% each year over the next few years.
Disney stock (DIS) is up 0.9%, outperforming the slightly down Communication Services sector. Benjamin Swinburne, an analyst, said that Bob Iger would return to his job as CEO even though there were “known but real secular and cyclical difficulties.”.
The chief, who is back, said he will concentrate on five things: Empower creative executives while continuing to cut costs in Disney’s media business; (2) implement a new succession plan (with a two-year window); (3) shift the focus to overall, consolidated earnings power (including dropping the 2024 Disney+ subscriber guidance); (4) keep the focus on content; and (5) “prepare for Disney 2025.”
Disney Stock Forecast
Swinburne says, “Over the long term, we continue to expect that Disney’s Parks & Experiences division and, starting in F24, its Media & Entertainment companies will be the main drivers of its earnings growth.”
The report says that the estimated high single-digit growth in revenue and segment operating income for the fiscal year 2023 is “attainable, even if the ad market gets tougher, cord-cutting continues, and the Shanghai park loses money because of a pandemic.”
Although the parks and experiences industry may be vulnerable to a declining consumer, he points out that future bookings are healthy. A new estimate for fiscal year 2023 says that the risk is about equal between the upside and the downside.
Swinburne changed its forecasts downward to reflect the new guidance. It now expects earnings per share in 2023 and 2024 to be $4.00 and $5.15, respectively, which is a little less than the average on Wall Street, which is $4.21 and $5.46.
And a lesser price estimate of $115 still suggests a 22% increase. The sequel to Avatar, which was the most successful movie ever at the box office, will come out next weekend, and Disney is ready for it to do well again.
Disney Stock: Lack Of Profitability From Streaming Is A Big Problem
Featured Image – Pexels © Magda Ehlers
Author Jowi Kwasu 
