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Disney Financial Outlook Preview: Challenge Netflix and Amazon Disney has been smashing ammunition

November 08, 2018 22:12
source: Investing

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*Financial report release time: after November 8 (Thursday)

*Expected revenue: $13.72 billion

* Expected earnings per share: $1.33

Nowadays,Disney(NYSE: DIS) and its investors are all nervous. Over the years, the global entertainment giant has continued to adjust its strategic alignment with Netflix (NASDAQ: NFLX) andAmazon(NASDAQ: AMZN) and other subversives from the Internet are competing. These subversives are robbing the audience and taking away Disney's advertising revenue.

After Disney's $71 billion acquisition of 21st Century Fox (NASDAQ: FOX), Disney became the main entrant in the streaming video market. The acquisition will be completed in the first half of 2019.

As Fox is included, Disney will double its investment in movies and television. Currently, Disney is still acquiring assets including: Fox FX Cable Channel, National Geographic TV Network, and film and television production companies that produce "Avatar," "X-Men," and "The Simpsons." The acquisition of Fox also significantly increased Disney's stake in Hulu, which shares a 60% stake in Hulu with Comcast (NASDAQ: CMCSA) and AT&T (NYSE: T). In addition, Disney is scheduled to launch another streaming service brand for children and families later next year.

It seems that Disney is fully fired. Disney's ESPN+ sports streaming service has been launched in just five months and already has more than 1 million users. The service costs $5 a month and offers thousands of live events, sports content on demand, and some exclusive content designed to boost its struggling ESPN network.

Disney CEO Robert Iger said:

“We have always believed that we have a very competitive brand and content that can thrive with Netflix, Amazon and any other company on the market.”

  Is it time to buy Disney?

Disney's stock has shed its pessimism before the announcement of the acquisition of the Fox deal in mid-June.


DIS Weekly 2015-2018

In recent months, Disney's share price has risen sharply, rising 15% in the past six months. Disney closed at $117.05 yesterday, only 2% below the 52-week high of $119.69. In fact, despite major technology stocks and other stocks being sold, Disney's share price performed very well in October and exceeded all major US stock indexes.

We believe this momentum will continue as Disney combines its newly acquired media assets with existing programs. This synergy will create a powerful streaming video service that is strong enough to challenge Netflix's dominance in this space.

The success of Disney's streaming video department is critical. As the largest source of income for Disney, the media and television networks have been in a difficult situation, and their audience and revenues have been snatched away by competitors and subversives from the Internet industry.

In the short term, Disney's movements will all focus on the integration after the acquisition of Fox and how Disney can quickly advance its plans. Later in the US time on Thursday, Disney will announce its fourth quarter and full-year earnings for 2018, and investors are eagerly awaiting details of the earnings report. according toAnalystDisney's fourth-quarter revenue is expected to be $13.72 billion, up 7.4% year-on-year, and earnings per share will be $1.33, up 24% year-on-year.

  in conclusion

We don't expect to see much better-than-expected results in Disney's earnings, but it's critical to understand how Disney plans to integrate Fox's assets and the online timeline for its streaming video services. Although Disney's share price is currently close to a high point, if investors are satisfied with Disney's forward-looking guidance, the stock price will definitely rise further.

(Article source: Investing)

                (Editor: DF134)

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