How Will Disney Stock Respond To Its Upcoming Earnings?

Walt Disney (NYSE:DIS) is scheduled to announce its earnings on May 7, 2025. Consensus estimates suggest that revenues will increase by approximately 5% year-over-year to $23.1 billion, with earnings expected to be $1.21 per share, remaining roughly unchanged from the previous year. We anticipate that the company's Experiences division, which includes Disney's parks, resorts, and cruise lines, will encounter some challenges due to decreased tourism in the U.S. and the fading of the post-Covid-19 surge. Nevertheless, the Direct-to-Consumer media segment may perform well, fueled by additional user growth and improved pricing per user. However, investors are expected to pay closer attention to Disney's future outlook. Newly implemented tariffs by the Trump administration have heightened the likelihood of a U.S. recession this year. Almost all of Disney’s activities – spanning theme parks, cruises, video streaming, and TV advertising – rely on discretionary spending, which may decline during an economic downturn.

Disney boasts a current market capitalization of $165 billion. Over the last twelve months, revenue amounted to $93 billion, and the company was operationally profitable, recording $13 billion in operating profits and a net income of $5.6 billion. Hence, if you are looking for potential upside with less volatility than individual stocks, the Trefis High-Quality portfolio offers a viable alternative, having outperformed the S&P 500 and yielding returns exceeding 91% since its inception.

Walt Disney's Historical Chances Of Positive Post-Earnings Return

Here are some insights regarding one-day (1D) post-earnings returns:

• There have been 20 earnings data points documented over the past five years, showing 9 positive and 11 negative one-day (1D) returns. In total, positive 1D returns occurred roughly 45% of the time.
• However, this percentage drops to 42% when we analyze data for the last 3 years instead of 5.
• The median of the 9 positive returns is 4.9%, while the median of the 11 negative returns is -2.6%

Additional information regarding the observed 5-Day (5D) and 21-Day (21D) returns following earnings is summarized, along with the statistics in the table below.

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Relationship Between 1D, 5D, and 21D Historical Returns

A comparatively less risky approach (although not beneficial if the correlation is weak) is to analyze the correlation between short-term and medium-term returns following earnings, identifying the pair with the highest correlation, and making the corresponding trade. For instance, if 1D and 5D indicate the highest correlation, a trader might position themselves “long” for the next 5 days if the 1D post-earnings return is favorable. Here are some correlation figures based on 5-year and 3-year (more recent) data. Please note that the correlation 1D_5D pertains to the relationship between 1D post-earnings returns and subsequent 5D returns.

Is There A Correlation With Peer Earnings?

At times, the performance of peers can impact post-earnings stock reactions. In fact, the pricing-in might start before the earnings are disclosed. Below is historical data on the prior post-earnings performance of Walt Disney stock in comparison to the stock performance of peers that announced earnings immediately before Walt Disney. For a fair assessment, peer stock returns also reflect post-earnings one-day (1D) returns.

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Discover more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (which includes all three indices: the S&P 500, S&P mid-cap, and Russell 2000), delivering robust returns for investors. Additionally, if you are seeking a smoother investment experience than an individual stock like Walt Disney, consider the High Quality portfolio, which has surpassed the S&P and achieved returns greater than 91% since its inception.