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

Disney (DIS) is scheduled to report results of its fiscal third quarter before the market opens on August 6, with a conference call scheduled for 8:30 am ET. What to watch for:

GUIDANCE: Along with its last report, Disney guided for FY25 adjusted earnings per share of $5.75. At the time, analysts expected the company to report FY25 EPS of $5.44, but that figure has since risen to $5.77. Meanwhile, Wall Street expects the media giant to report Q3 EPS of $1.44 on revenue of $23.75B.

PT HIKES: On Monday, Morgan Stanley raised the firm’s price target on Disney to $140 from $120 and kept an Overweight rating on the shares. Thanks to growth in its Experiences and Streaming businesses, the firm sees Disney generating “healthy” double digit adjusted EPS growth in the years ahead if the macro backdrop remains healthy, says the analyst, who lifted the firm’s adjusted EPS estimates by about 5% as the firm “largely” unwinds macro-related risk in advertising and parks.

UBS also recently raised the firm’s price target on Disney to $138 from $120 and reiterated a Buy rating on the shares. The firm expects the company’s fiscal Q3 report to show resilient demand in the Parks segment and improvement in direct-to-consumer profitability. These should support a continuation of double digit earnings growth for Disney, the analyst said.

Meanwhile, MoffettNathanson analyst Michael Nathanson increased the firm’s price target on Disney to $140 from $130 and maintained a Buy rating on the shares. The firm believes attendance at Disney parks remains largely unaffected by the Epic Universe open. Citing wait time data and a firsthand visit, the analyst believes Epic needs to improve crowd control and expand its capacity to deliver a better guest experience. Regarding Disney’s direct-to-consumer offerings, MoffettNathanson thinks the Hulu arbitration resolution should “finally allow” Disney to take the next step to deliver more engagement, increased synergies, and faster margin expansion.

Additionally, Guggenheim last month raised the firm’s price target on Disney to $140 from $120 and kept a Buy rating on the shares. The firm, which updated its Disney model to better reflect a refined operating expense outlook at Linear Networks, modestly lower theatrical revenue from relative underperformance of recent films, better than previously forecast Sports advertising revenue and “relatively resilient” attendance and travel trends in the Experiences segment, notes that it lifted its full year segment operating income forecast to $17.7B from $17.6B, which is “modestly ahead” of consensus $17.65B. With Hulu now fully under Disney control, the firm views the company as “well positioned to pursue a unified direct-to-consumer strategy” and further lean into bundle packaging to drive incremental revenue, the analyst added.

JEFFERIES UPGRADE: In late June, Jefferies analyst James Heaney upgraded Disney to Buy from Hold with a price target of $144, up from $100. The firm sees limited risk of a second half of 2025 Parks slowdown from Epic Universe and macro factors and is more positive on FY26 Cruise upside, the analyst tells investors. In addition, the firm views the content and sports slate for the next six months favorably, highlighting the ESPN DTC launch, Zootopia 2 and Avatar 3 and expects continued DTC margin expansion.

AI: When Disney began working on the live-action version of “Moana,” executives debated on cloning its star, Dwayne Johnson, Jessica Toonkel and Erich Schwartzel of The Wall Street Journal reported this week. While Johnson approved a plan that involved creating deepfakes of his face, the new technology had Disney attorneys spending a lot of time hammering out the details over how it could be deployed and what security precautions would be put in place. Additionally, attorneys worried the studio couldn’t claim ownership of every element of the film if AI generated parts of it, people involved in negotiations said. While Disney and Metaphysic spent 18 months negotiating on the terms of the contract and working on the digital double, none of the footage will be in the final film when its released.

ESPN DTC: In May, Disney’s ESPN announced that its new direct-to-consumer streaming service will be named “ESPN,” with fans will have two ESPN DTC plans from which to choose, including an unlimited package that delivers the entire suite of ESPN networks and content. The plans will cost $29.99/month for the unlimited package and $11.99/month for a select option. There will also be bundling opportunities for the ESPN unlimited plan with Disney+ and Hulu, including a special offer at launch for $29.99/month for the first 12 months. It was previously announced that the direct-to-consumer offering will launch in early fall and that ESPN will continue to be available through traditional MVPDs and DMVPDs. The unlimited plan will give fans access to all of ESPN’s linear networks – ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ESPN Deportes – in addition to ESPN on ABC, ESPN+, ESPN3, SECN+, and ACCNX, covering 47,000 live events each year, on-demand replays, studio shows, original programming, and more. Existing ESPN+ subscribers will automatically become subscribers to ESPN’s new service, based on their current subscription level. Standalone ESPN+ subscribers get the ESPN select plan, and Disney+, Hulu, ESPN+ bundle subscribers get the ESPN select bundle.