Here’s what Wall Street is saying about Disney ahead of earnings

Disney (DIS) is scheduled to report results of its fiscal second quarter before the market opens on May 7, with a conference call scheduled for 8:30 am ET. What to watch for:

GUIDANCE: Along with its last report, Disney guided for fiscal 2025 adjusted earnings per share growth in the high-single digits. At the time, analysts were expecting the company tot report FY25 EPS of $5.41, but that figure has since risen to $5.44. For Q2, Wall Street expects Disney to report EPS of $1.21 on revenue of $23.13B.

FILM INDUSTRY TARIFFS: After President Trump announced in a social media post earlier this week 100% on all movies coming into the U.S. produced in “Foreign Lands,” Morgan Stanley said that, in the bear case, this likely reduces the earnings power of all companies in the value chain. The firm added that 100% tariffs on some or all of the cost of a film would lead to fewer films, more expensive films, and lower earnings for all in the business. Morgan Stanley further points out that the reality is that for any given film, there can be writing, production, editing, post-production, visual effects–all done in different countries. Retaliatory tariffs are an additional risk, as they might give foreign governments an incentive to tax or block U.S. streaming services and/or film releases, the firm argues.

Barclays analyst Kannan Venkateshwar echoed the sentiment, noting that while some names in the media sector, including Netflix (NFLX), had been seen as defensive due to lack of exposure to tariff-related threats, headlines about 100% tariffs on foreign-made films are “likely to result in this hypothesis being questioned.” However, there are “literally no details available at this point other than a social media post from President Trump,” so it is not clear how this will be implemented, the analyst noted. If this is deployed on a wide scale, it “may end up harming the very industry it is supposed to help” given that the U.S. exports triple the amount of content that it imports and generates $15B in trade surplus, the analyst added.

Following the news, The Wall Street Journal reported that Hollywood has been pleading with politicians to help stop the departure of film and TV production to other countries, but the 100% tariffs on imported movies wasn’t what Hollywood had in mind. Executives in the entertainment industry expressed confusion on how a levy could be applied to intellectual property with no specific monetary value and fear the retaliatory tariffs could damage their overseas business.

GOLDMAN ON THEME PARKS: Last week, Goldman Sachs maintained a Buy rating and $140 price target on Disney but warns that the company’s domestic attendance growth is estimated to be down 1% y/y in Q2. March Orlando airport arrivals were down 7% y/y, even though results may have been negatively impacted by the Easter shift which could have delayed travel plans from March into April, the analyst told investors in a research note.

WOLFE UPGRADE: Wolfe Research upgraded Disney to Outperform from Peer Perform with a $112 price target last month. The firm said at the time that the Disney “castle” is “intact” amid risk of a recession. The company has “durable advantages” in parks, cruises, and streaming, which create a path to $7 in earnings per share, the analyst tells investors in a research note. Wolfe adds that at $85 per share, Disney trades at a 23% discount to the S&P 500. The firm sees only 17% downside in a “worst” case scenario.

BOFA UNDERLYING TRENDS: BofA said in a note from late March that Disney’s Experiences segment is currently the largest contributor of operating income and cash flows and has been challenged recently. That said, the firm projects fiscal Q2 will reflect a sequential improvement in the Experiences segment operating income, which will subsequently accelerate in Q3 and Q4, aided by easier comps and the contribution of a new cruise ship that should be profitable in its first full quarter. Following strong fiscal Q1 results, there was increased confidence in Disney’s ability to hit, if not potentially exceed, their FY25 outlook and while recent macro uncertainty adds risks, the firm does not see signs of underlying fundamentals coming under pressure, said the analyst, who reiterated a Buy rating and $140 price target on Disney shares.