Disney Rides on Portfolio Strength, Competition Woes Remain

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On Jan 03, we issued an updated research report on DisneyDIS .

Disney, together with its subsidiaries and affiliates, is one of the world's largest diversified entertainment companies. The company's assets span across movies, television, publishing and theme parks.

Notably, Disney beat the Zacks Consensus Estimate in three of the trailing four quarters, delivering average positive surprise of 8.52%.

However, the company has lost 4.7% over the past year compared with the industry 's decline of 2.8%.

Factors Influencing the Stock

Disney's popular content slate is aiding portfolio strength. The company's animation flick Ralph Breaks the Internet reached the zenith of the top 10 weekend domestic box-office estimates. This helped Disney achieve the worldwide $7-billion mark year to date as of Dec 10.

Additionally, Mary Poppins Returns raked in $23.5 million at the domestic box office last week. Moreover, The Avengers: Infinity War had made a whopping $258 million domestically on the opening weekend itself. Further, Disney's Black Panther alone generated $700 million in domestic sales to become the third-highest blockbuster in the United States.

Black Panther and Avengers: Infinity War also significantly contributed to fourth-quarter fiscal 2018 Studio Entertainment revenues, which surged 50.2% year over year to $2.2 billion. Further, Disney's line-up for the next year, including Captain Marvel , Dumbo , Aladdin , The Lion King , Toy Story 4 and the next Avengers film, is expected to deliver yet another year of massive hits.

The Walt Disney Company Revenue (TTM)

The Walt Disney Company Revenue (TTM) | The Walt Disney Company Quote

Robust collections from these movies also bode well for the Consumer Products division, as demand for merchandise associated with super hit movies usually skyrockets, as seen in case of Frozen . Also, addition of popular themes like Star Wars and Toy Story to Parks & Resorts are likely to increase footfall.

Additionally, the streaming service Disney+, expected to be available by late 2019, will host a rich array of original Disney, Pixar, Marvel, Star Wars and National Geographic content. In addition, users will have unprecedented access to Disney's library of film and television content.

However, the launch of Disney+ comes at a time when Netflix NFLX is charging ahead in the streaming space with its award-winning portfolio . Moreover, the entry of players like Apple AAPL , AT & T T and Sinclair Broadcast Group in the market will heat up competition.

Nevertheless, Disney's popular franchises coupled with Twenty-First Century Fox acquisition are expected to boost the top line.

Disney currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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