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Walt Disney (DIS) Gains But Lags Market: What You Should Know

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Walt Disney (DIS - Free Report) closed the latest trading day at $92.02, indicating a +0.82% change from the previous session's end. The stock lagged the S&P 500's daily gain of 1.03%. At the same time, the Dow added 0.87%, and the tech-heavy Nasdaq gained 1.26%.

The the stock of entertainment company has fallen by 4% in the past month, lagging the Consumer Discretionary sector's gain of 4.64% and the S&P 500's gain of 3.01%.

The investment community will be closely monitoring the performance of Walt Disney in its forthcoming earnings report. The company is expected to report EPS of $1.01, up 2.02% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $23.54 billion, up 0.11% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $4.38 per share and revenue of $91.99 billion, which would represent changes of +16.49% and +3.48%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Walt Disney. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 5.15% lower within the past month. Right now, Walt Disney possesses a Zacks Rank of #5 (Strong Sell).

Valuation is also important, so investors should note that Walt Disney has a Forward P/E ratio of 20.84 right now. This expresses a discount compared to the average Forward P/E of 27.73 of its industry.

Also, we should mention that DIS has a PEG ratio of 1.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Media Conglomerates industry stood at 2.22 at the close of the market yesterday.

The Media Conglomerates industry is part of the Consumer Discretionary sector. This industry, currently bearing a Zacks Industry Rank of 195, finds itself in the bottom 23% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DIS in the coming trading sessions, be sure to utilize Zacks.com.


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