The stock price surged by 20% in just one month. Similarly, the company's earnings are expected to grow by 20% this fiscal year. And to top it off, there's news of a $3 billion share buyback program. It might sound like something out of a fairy tale, but it's very much a reality. Keep reading for further details.
The share price of Walt Disney Company (DIS) surged by 20% over the past month, surpassing both the S&P 500 index and the Media Conglomerates industry, which saw gains of 13.2% during the same period.
Last week, the company's shares soared by 12% following a strong earnings report. In the December quarter, the media giant reported revenue of $23.5 billion and adjusted profits of $1.22 per share. Analysts had predicted figures of $23.8 billion and $1.01 per share, respectively.
Projections for the current quarter anticipate earnings of $1.04 per share, representing an 11.8% increase year-over-year. For the entire fiscal year, earnings are estimated to reach $4.48 per share, marking a 19.2% rise from the previous year. The following fiscal year is expected to see earnings of $5.48 per share, indicating a 22.4% increase from the prior year.
Disney is also forecasted to experience revenue growth, with estimates showing increases of 1.7%, 2.8%, and 5.4% for the current quarter, current fiscal year, and next fiscal year, respectively.
Disney CEO Bob Iger expanded the company's presence in the gaming industry by investing $1.5 billion in Epic Games, the maker of Fortnite. This partnership aims to develop new games within an "entertainment universe" where users can interact with content and characters through playing, watching, shopping, and engaging.
What’s more, Disney announced a 50% hike in the semi-annual dividend and introduced a $3 billion share buyback program. What’s even more, the company reduced its losses from streaming services and anticipated a minimum 20% year-over-year increase in full-year earnings per share (EPS).
All these factors combined led to an upgrade of Disney shares from "Hold" to "Buy," with the target price raised to $120.
