Walt Disney (DIS) delivered disappointing Q4 2021 results characterized by earnings and revenue missing consensus estimates. The miss came despite the company making impressive strides in reopening the business in the aftermath of the pandemic. DIS shares fell 0.4% to close at $174.45 on November 10.
Walt Disney is a diversified media and entertainment company. It owns cable networks like ESPN and is also involved in producing and distributing motion picture content. It also operates theme parks, resorts, theaters, and cruise lines. (See Top Smart Score Stocks on TipRanks)
Revenue in the quarter climbed 26% year-over-year to $18.53 billion, missing consensus estimates of $18.78 billion. Diluted earnings per share improved to $0.37 compared to a loss of $0.20 delivered the same quarter last year. However, it missed consensus estimates of $0.44.
According to CEO Bob Chapek, fiscal 2021 has been a productive year going by the strides made in the reopening of the business. Disney has made meaningful and innovative steps in Direct to Consumer, having also opened its theme parks and theaters. The company’s streaming service Disney+ also continues to gain traction, adding 2 million subscribers in Q4.
Disney is still feeling the effects of COVID-19 in some of its business segments. For instance, operations at theme parks’ Experiences and Products are at reduced capacity. Theaters have also been subject to capacity limitations.
While television production did resume in the fourth quarter, disruption in production activities is still a big problem. Disney also continues to incur costs associated with implementing safety measures. The costs totaled approximately $1 billion in fiscal 2021.
Last month, Wells Fargo analyst Steven Cahall reiterated a Buy rating on the stock with a $203 price target, implying 16.4% upside potential to current levels.
Consensus among analysts is a Strong Buy based on 17 Buys, and five Holds. The average Disney price target of $211.57 implies 21.3% upside potential to current levels.