The Walt Disney Company Just Beat EPS By 21%: Here's What Analysts Think Will Happen Next

It's been a pretty great week for The Walt Disney Company (NYSE:DIS) shareholders, with its shares surging 14% to US$111 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$24b were what the analysts expected, Walt Disney surprised by delivering a (statutory) profit of US$1.04 per share, an impressive 21% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Walt Disney

Following the latest results, Walt Disney's 27 analysts are now forecasting revenues of US$92.0b in 2024. This would be a credible 3.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 135% to US$3.83. Before this earnings report, the analysts had been forecasting revenues of US$92.4b and earnings per share (EPS) of US$3.37 in 2024. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.5% to US$109. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Walt Disney analyst has a price target of US$130 per share, while the most pessimistic values it at US$63.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Walt Disney's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 7.4% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Walt Disney is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Walt Disney's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Walt Disney analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Walt Disney .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.