- Disney is set to report earnings after Tuesday’s closing bell.
- Ahead of the report, Disney’s stock is popular among millennial investors.
- Wall Street has largely been optimistic on the company after it announced plans to launch its own video-streaming service.
- Watch Disney’s stock price move in real time here.
Disney has managed to steal the hearts of young investors.
The entertainment company is set to report earnings after the bell on Tuesday, and its popularity among millennial investors may bring some optimism to the earnings season. Disney is expected to report adjusted earnings of $US1.61 per share on $US15.44 billion in revenue, according to Bloomberg data.
Among millennials, Disney is the fifth-most held stock on the trading app Stockpile, which lets users trade in fractional shares. It’s also the sixth most-traded stock among millennials this week.
Stockpile’s data shows millennials were buying Disney shares 3.5 times more than they were selling.
Meanwhile, Wall Street is upbeat about Disney’s move to compete with lower-cost streaming service than rival Netflix. In December, Disney announced plans to acquire21st Century Fox‘s film and TV assets for $US52.4 billion. Just months earlier, the video-streaming firm BAMTech was added to Disney’s arsenal.
The ultimate video-streaming product could deliver original Disney content and its most popular franchises, such as Star Wars and Marvel, straight to consumers, leading them away from competitors like Netflix and Amazon.
Yet Disney is a legacy company, and they do not have a history proving they can execute something completely new, particularly something that is different from its traditional TV models. Disney will need to spend a significant amount of money to try and play catch up with Netflix, analysts noted.
“We see Dec-Q results constrained by further investment at BamTech, Hulu equity affiliate losses, higher TV programming costs, and revenue recognition timing at consumer products,” Tuna Amobi of CFRA Research wrote in a note. “Still, we see continued strength at the theme parks and a robust film pipeline through FY 18 (Sep.), plus growth in media networks subscriptions and ads.”
Shares of Disney were down 6.66% for the year and were down about 1% on Tuesday at $US103.75 per share.
Read more about why one analyst believes Disney is making the right choice with its acquisition of 21st Century Fox.