Walt Disney (NYSE: DIS) shares tumbled more than 13% on Wednesday following the company’s fiscal fourth-quarter earnings release after the close on Tuesday, in which it missed earnings and revenue expectations.
The media and entertainment company posted earnings per share of $0.30 on revenue of $20.15 billion, missing expectations of earnings of $0.59 per share on revenue of $21.38 billion.
Following the release, various analysts cut their firm’s price targets on the stock:
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Barclays analyst Kannan Venkateshwar reduced the firm’s price target on Disney shares to $98 from $105, keeping an Equal Weight rating. The analyst stated that given the backdrop of falling estimates and low visibility, Disney’s valuation has downside and the company’s revenue and operating income guidance next year imply profitability across most of Disney’s segments could be worse than expected, in some cases, materially so. In addition, Venkateshwar says the streaming guidance is “also likely to be tough to get to without tradeoffs.”
Meanwhile, JPMorgan’s Philip Cusick cut the price target on Disney to $135 from $145, maintaining an Overweight rating on the shares. Cusick told investors in a research note that Disney reported “mixed overall” fiscal Q4 results. However, the analyst will feel better about shares once consensus direct to consumer operating income losses catch up to estimates, which he believes is much more likely after the company’s earnings call. As a result, Cusick favors Disney shares into the direct-to-consumer improvements through fiscal 2023.
Finally, Wells Fargo analyst Steven Cahall decreased the firm’s price target on Disney to $125 from $145, keeping an Overweight rating on the stock following the earnings release. Cahall stated that he still likes Disney’s long-term KPIs, but he “can’t escape the pain” of another round of earnings cuts.
While Cahall likes the stock, he believes it will trade heavily until revision trends improve and is bullish despite the short-term headwinds.
Disney’s price target was also cut at firms such as Credit Suisse, Cowen, KeyBanc, and UBS on Wednesday.