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Disney Stock: Dow Giant Looks To End 2023 On A High Note, Streaming Rival To Report Results

HARRISON MILLER09:41 AM ET 11/07/2023

https://www.investors.com/news/disney-stock-dow-giant-looks-to-end-2023-on-a-high-note-streaming-rival-to-report-results/?src=A00220

Wall Street expects Dow Jones entertainment powerhouse Disney (DIS) to end fiscal 2023 on a positive note with Q4 results late Wednesday. Streaming rival Warner Bros. Discovery (WBD) also reports its Q3 earnings Wednesday. Disney stock and WBD shares were little changed early Tuesday.

Disney Earnings

The Dow behemoth reported earnings declines the past four quarters along with an average 8.5% sales growth during the period.

FactSet analysts forecast a 136% increase in adjusted earnings to 71 cents per share on 6% revenue growth to $21.37 billion.

Targets call for a 9.8% rise in Disney parks and experiences revenue, to $8.15 billion. Wall Street sees Disney+ subscribership at 148.73 million for the quarter, improving from 146.1 million in Q3, but down 9.4% from last year.

Total Hulu subscribers are expected to climb to 49.43 million, up from 48.3 million last quarter and growing 4.7% from 2022 levels.

Analysts see ESPN+ subscribers ticking up 2.5% quarter-over-quarter to 25.84 million. Disney reported 24.3 million ESPN+ subscribers for Q4 2022.

Hulu Deal, ESPN BET Launch

Last Wednesday, Disney announced plans to purchase the remaining 33% stake in Hulu from Comcast (CMCSA)-owned NBC Universal. The House of Mouse expects to pay NBCU about $8.61 billion by Dec. 1, based on the terms of an options agreement from 2019. The exact timing is uncertain but the deal should close in the 2024 calendar year.

Disney announced plans early Thursday to launch its ESPN BET online sportsbook across 17 states in the U.S. on Nov. 14, subject to final approvals.

Additionally, ESPN is now using official odds provided by ESPN BET across its editorial and other content. And ESPN's Daily Wager program will rebrand to ESPN BET Live, starting Nov. 10.

ESPN partnered with Penn Entertainment on a gambling sportsbook in August. Under the deal, Penn Entertainment (PENN) rebranded its Barstool Sportsbook as ESPN BET. Meanwhile, ESPN will use ESPN BET exclusively. And Penn will pay ESPN $1.5 billion cash over 10 years, plus $500 million in warrants to buy PENN stock. In return, Penn will have exclusive rights to the ESPN BET trademark in the U.S. for the next decade.

Disney Stock

Disney stock was flat Tuesday and eased 1.2% Monday. Shares rallied 7.2% last week after climbing Thursday and Friday on the Hulu and ESPN BET news.

Disney stock has been in a steady downtrend this year as it contends with bulging content costs, while theme park traffic is bouncing back from pandemic shutdowns. The Dow Jones index company implemented a major restructuring plan to cut $5.5 billion in costs.

Disney stock has so far faded 3.3% in 2023.

Warner Bros. Earnings

Warner Bros., the parent company of Max, formerly known as HBO Max, announces Q3 results early Wednesday.

FactSet analysts expect Warner Bros. to report an adjusted loss of 3 cents per share, improving from a loss of 76 cents per share last year. Sales are predicted to rise 1.6% to $9.98 billion.

Shares spiked more than 23% last week after streaming platform Roku (ROKU) rocketed on its Q3 revenue beat and reported 2.3 million new accounts for the period. The move marked the biggest weekly gain for WBD stock since January 2022.

WBD stock reclaimed its 50-day moving average on last week's jump but is still trading well below its 200-day line.

WBD stock rose slightly early Tuesday and fell 2.7% Monday.

Shares rallied about 22% so far this year, having fallen from their 2023 high of 16.34 from late February.