Disney's beat-and-raise quarter has analysts upbeat about further gains
Disney's strong quarterly results and full-year guidance raise has analysts giddy at the media giant's prospects. The company posted fiscal second-quarter earnings and revenue that exceeded consensus estimates, driven in part by an unexpected uptick in streaming subscribers and upped its full-year guidance. The report sent Disney shares up more than 10%, boosting the Dow Jones Industrial Average. Wednesday's gain put share on pace for their best day since April 9. Heading into Disney's earnings release, analysts were closely awaiting the company's theme parks and streaming results — segments viewed as highly vulnerable to macro weakness. The company managed to post revenue growth across all its segments during the fiscal third quarter. Here are what some of the top analysts on Wall Street said after Disney reported earnings: Barclays reiterates overweight rating and $115 target According to analyst Kannan Venkateshwar, Disney has the least structural risks relative to other media companies — in addition to the largest potential gains from its streaming business. This price target implies 24.8% upside from Tuesday's close. "The company's performance in the first half and guidance for the rest of the year should help investors gain more conviction around growth trajectory. … Overall, we continue to believe Disney remains one of the most attractive investments in our coverage universe despite obvious macro exposure." Bank of America maintains buy rating, $140 price target Analyst Jessica Reif Ehrlich noted that Disney's earnings growth outlook increase is encouraging with recent macro concerns in mind. Her target price of $140 per share implies nearly 52% upside. "Near term catalysts include: 1) profitability inflection in DTC, 2) reacceleration in the Parks business and 3) strong film slate which drives other businesses (DTC, Parks and Consumer Products)." UBS reiterates buy rating, $105 price target Analyst John Hodulik highlighted Disney's "resilient results," as well as its 29% year-over-year growth in advertising across its sports segment. "Total revenues grew 7% y/y (UBSe 4%/Street 5%), while segment OI grew 15% to $4.44B (UBSe $4.06B, Street $3.98B)." Goldman Sachs keeps buy rating, $140 target Analyst Michael Ng pointed to outperformance in the company's experiences division, which was driven by better-than-expected domestic theme park attendance. Ng is bullish on the profitability prospects for Disney, as well as improved studio costs and theme park growth. His price target implies upside of more than 51% from Tuesday's close. "We are Buy-rated on DIS as we believe the company is a high quality EPS compounder supported by 1) continued progression to scaled long term DTC profitability made possible by wholesale arrangements, bundled offerings, password sharing restrictions and other initiatives; 2) studio performance improvement (from a period of under earning) enabled by cost rationalization and organizational restructuring."
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Atlantic
41 minutes ago
- Atlantic
Hollywood's Nostalgia Timeline Is Getting Shorter
There's a coincidental yet meaningful connection between two of this summer's buzziest movies. The new Lilo & Stitch and How to Train Your Dragon are both remakes; beyond that, they're both live-action adaptations of animated films—each of which happened to have been co-directed by Dean DeBlois and Chris Sanders. Lilo & Stitch has made a fortune at the box office since its late-May debut; How to Train Your Dragon, which opens today, seems similarly poised for success. The two features are, if a little lacking in visual stimulation compared with their forebears, reliably entertaining. But taken together, they signal something rather alarming in Hollywood's ongoing crisis of imagination: The timeline for nostalgia is growing shorter. Since Tim Burton's big-budget take on Alice in Wonderland grossed more than $1 billion in 2010, the live-action remake has become an inevitable, pervasive cinematic trend. Fifteen years later, it seems that capturing similar financial success requires a studio to look at progressively more recent source material to work with. Disney's attempt to update the nearly 90-year-old Snow White failed at the box office earlier this year; the company shuffled efforts such as a new Pinocchio and Peter Pan off to streaming, despite the recognizable directors and casts involved. The muted response to these modern takes on decades-old classics perhaps explains the move toward reviving properties that resonate with much younger generations instead. The original Lilo & Stitch is 23 years old; How to Train Your Dragon, produced by DreamWorks Animation, is only 15. Next year, a remake of Moana will hit theaters less than a decade after the original film's release. Is that even enough time to start feeling wistful about it? Clearly, the answer is yes, given how audiences have flocked to similar adaptations. The sentimental fervor around franchises such as How to Train Your Dragon is particularly unsettling to me, because the first entry premiered when I was fully an adult; the DreamWorks canon (which also includes such films as Shrek and Kung Fu Panda) was established when I was past the ideal age to become invested. However, I've seen How to Train Your Dragon many times because my daughter is a fan; that intense familiarity helped me out as I watched the live-action version, looking for anything that might feel different about it—which would thus justify its creation. Not so much. DeBlois, who also directed the two How to Train Your Dragon sequels, makes his live-action debut by adapting his own feature; as such, the end result is wildly similar to the earlier work. The new film is again set in a Viking village that is constantly besieged by different kinds of dragons. The plucky teen son of the chief, a boy named Hiccup (played by Mason Thames), befriends a sleek black dragon named Toothless and learns that fighting the beasts isn't the only answer. The actor who voiced Hiccup's father in the animated film, Gerard Butler, returns to perform the role on-screen; in all other cases, the film uses well-suited performers to replace the voice cast. To my own surprise, I liked the new version of How to Train Your Dragon about as much as I do its ancestor. Both, to me, are above-average bits of children's entertainment that struggle with the same problems: They start to sag near the end and suffer a little from their murky color palette. I got a little choked up at the exact same point that I do while watching the 2010 Dragon, when Hiccup and Toothless take to the sky together; the boy rides on a saddle he's made for his fire-breathing pal, and the composer John Powell's excellent score soars into inspirational mode, all strings and bagpipes. If there's a difference between these redone scenes and their inspirations, it's a remarkably minor one; only good theater decorum stopped me from pulling out my phone and running the two Dragon s side by side. Hollywood is struggling to get people to buy movie tickets, so I understand the impulse to offer something that a broad swath of viewers already knows and likes. But there's simply no sense of risk in making something like How to Train Your Dragon —nothing that will convince said theatergoers that the medium has a future beyond recycling. Yes, visual-effects technology is up to the task of re-creating a cartoon on a larger scale and dotted with real actors, and yes, these redos tend to turn a profit for their makers. These shouldn't be the only reasons for art to exist. Lilo & Stitch, at least, diverges somewhat from its source material. Because most of the characters are human beings, its world seems easier to translate to one composed of flesh and blood. The film, like How to Train Your Dragon, is about a shiftless youngster (Lilo, a Hawaiian girl who has been acting out since the death of her parents) bonding with a fantasy creature (Stitch, a blue alien experiment designed as a weapon of destruction). The director Dean Fleischer Camp's tweaks for his rendition didn't particularly click for me, however. One amusing character (another alien who is searching for Stitch) is absent entirely, and the revised ending has prompted some pushback, though Fleischer Camp has tried to defend it. In theory, I should be pro-change, given that I found the carbon-copy nature of How to Train Your Dragon so irksome—except that Lilo & Stitch doesn't really commit to its big alterations. The animated versions of Lilo and her older sister, Nani, forge a closer connection after meeting Stitch and his extraterrestrial hunters; the live-action Lilo enters the care of family friends at the end of the film, so that Nani can go off to study in California. These adjustments to the girls' relationship are a bit bold, because the prior film is so emotionally focused on their frayed sisterhood, yet the remake quickly undercuts their separation with the revelation that Nani can just visit Lilo anytime she wants, thanks to some space technology that Nani has borrowed. Such a cop-out is the underlying, depressing reality with all of these remakes: No change can be too daring, no update too significant. It's heartening that Sanders, a co-director of the original Dragon and Stitch, is one of the few people working in animation who's still committed to innovation. Last year, he directed The Wild Robot; much like How to Train Your Dragon, it is an adaptation of a children's book upon which Sanders found an exciting visual spin. The movie was a critical success, a box-office hit, and an Academy Award nominee. Cinema needs more entries like The Wild Robot —novel works that take chances and trust the audience to follow along. If nothing else, they provide fodder for more live-action remakes in the near future. Hollywood can't have these nostalgic adaptations without something to redo in the first place.
CNBC
an hour ago
- CNBC
Israel-Iran conflict will hang over markets next week, with Fed meeting at hand
The Israel-Iran conflict will continue to hang over the stock market next week, as investors wait and see whether there will be an escalation in the region. Traders will also be awaiting the latest Federal Reserve meeting. Though the initial stock response to the attack was subdued, equity losses deepened on Friday afternoon. The Dow Jones Industrial Average lost more than 800 points as Iran launched missiles at Israel, according to Tehran and Israel Defense Forces. The worsening tensions spurred a return to risk-off sentiment in the market, just as the S & P 500 was nearing its all-time record. Oil prices surged, while defense stocks rallied. Volatility is back up, with the CBOE Volatility index on Friday briefly climbing above 20. Semiconductor stocks , which enjoyed a big rally this week, are down. Nvidia is down. Gold , which stalled a bit from its historic rally this year, has perked up again. .VIX 1D mountain CBOE Volatility Index, over one day Investors are reacting by taking money off the table heading into the weekend, worried further retaliatory actions between the two countries will mark an escalation of conflict in the region. "Markets' reaction next week is really going to coalesce around what else we learn about the ongoing events between Israel and Iran, and if there's escalation by either side, retaliation and/or escalation by Israel, that will likely keep a bit of a cloud on risk assets," said Art Hogan, chief market strategist at B. Riley Wealth Management. "And only time will tell what that looks like." On Friday, the 30-stock Dow was on course for a losing week, down more than 1%. The S & P 500 was down 0.4% on the week, while the Nasdaq Composite was off 0.6%. Fed meeting The Fed is just about universally expected to hold rates steady next week. But, more important will be what Fed Chair Jerome Powell says in his post-meeting comments, as well as what surfaces in the latest Summary of Economic Projections, in regards to how policymakers are thinking through the path forward for monetary policy. According to the CME FedWatch Tool , markets are currently pricing in two quarter percentage point rate cuts, starting in September. For the most part, investors are expecting the same consistent message from Powell, who they're sure will reiterate that the central bank remains data dependent. This week's cooler inflation data , for example, could give policymakers flexibility to continue watching for the impact of tariffs on the economy in upcoming reports. But, some wonder if there could be a slight dovish tilt to the Fed chair's messaging, especially with the labor market, while still resilient, starting to show some cracks. "The market is going to be curious to hear how the Fed is assessing these dynamics of more benign inflation data, plus a slight deterioration in labor market data, and basically, does that allow them to strike more dovish tone at this meeting," said John Belton, portfolio manager at Gabelli Funds. "I do think that the recent data supports at least a couple cuts by year end," Belton continued. "The question is, are these going to be reactive, or is it coming from a place of confidence?" Recent Fed speak has investors more confident that central bank policymakers could start to cut as well. In late May, Fed Governor Christopher Waller told Fox Business that he sees a path for the central bank to cut interest rates in the second half of 2025, if Trump's tariffs are down to around 10%. However, others expect the Fed may not cut as much as the market is pricing in. David Kelly, chief global strategist at J.P. Morgan Asset Management, said he anticipates just one rate cut this year, worried that the reconciliation bill, pushed through when the consumer remains robust, will be inflationary for the economy. "That, I think, is something the Federal Reserve is very focused on," Kelly said. "Whatever they pretend about cutting the deficit in the long run, in fact, what they're going to do is expand the deficit quite a lot in 2026 relative to where it was in fiscal 2025 and the Fed doesn't want to be stimulating, or be further stimulating, in an already over stimulated economy." Next week will also be a shortened trading week, with markets closed Thursday for the Juneteenth national holiday. Week ahead calendar All times ET. Monday, June 16 8:30 a.m. Empire State Index (June) Bond market: Auction 20-year bond Earnings: Lennar Tuesday, June 17 8:30 a.m. Export Price Index (May) 8:30 a.m. Import Price Index (May) 8:30 a.m. Retail Sales (May) 8:30 a.m. Capacity Utilization (May) 9:15 a.m. Industrial Production (May) 9:15 a.m. Manufacturing Production (May) 10 a.m. Business Inventories (April) 10 a.m. NAHB Housing Market Index (June) Bond market: Auction 5-year TIPS Earnings: Jabil Wednesday, June 18 8:30 a.m. Building Permits preliminary (May) 8:30 a.m. Continuing Jobless Claims (06/07) 8:30 a.m. Housing Starts (May) 8:30 a.m. Initial Claims (06/14) 2 p.m. FOMC Decision 2 p.m. Fed Funds Target Upper Bound Thursday, June 19 Markets closed for Juneteenth National Independence Day Friday, June 20 8:30 a.m. Philadelphia Fed Index (June) 10 a.m. Leading Indicators (May) Earnings: Darden Restaurants, CarMax , Kroger
CNBC
an hour ago
- CNBC
Stock losses accelerate on Israel-Iran attacks — plus, the latest on Amazon, Meta and Apple
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Wall Street moved lower Friday afternoon as tensions in the Middle East escalate following Israel's attack on Iranian nuclear infrastructure. Iranian state TV said that it has suspended nuclear weapons negotiations with the U.S. — the two sides had been set to talk on Sunday. Not long afterward, as headlines around Iranian missile attacks in Israel surfaced, losses in the stock market picked up steam. The Dow Jones Industrial Average dropped nearly 2%, leading to the downside, while both the S & P 500 and Nasdaq fell more than 1%. Meanwhile, oil prices spiked on the news, though the gains have moderated compared with where they were in overnight trading. Brent crude, the international benchmark, surged 7% to above $74 a barrel. U.S. oil benchmark West Texas Intermediate crude also popped 7%, trading close to $73 a barrel. As Investing Club Portfolio Analyst Zev Fima wrote earlier this afternoon , our approach right now is to sit on our hands and not make any dramatic moves to the portfolio. "So as we approach what could be a weekend packed full of fear-inducing geopolitical headlines, we have to do that most difficult of things: nothing," he wrote. Medical shuffle: Club name Amazon is reorganizing its health-care business into six new units "with the goal of creating a simpler structure," our CNBC colleagues Annie Palmer and Ashley Capoot reported Friday. Here are a few excerpts from their story, though we recommend reading it in full : "Our leadership team has been focused on simplifying our structure to move faster and continue to innovate effectively," [Neil Lindsay, senior vice president of Amazon Health Services] said in a video chat. "One of the problems we're trying to solve is the fragmented experience for patients and customers that's common in healthcare." .... Amazon declined to share financial figures for its health business, but Lindsay said it is seeing "very strong growth" across the offerings. As long-term investors in Amazon, we remain intrigued by its ambitions in the massive health-care industry, particularly using its logistics prowess on the prescription drug delivery side. The acquisition of One Medical, a primary care provider, also was a big deal — and at the company's annual shareholder meeting in late May, CEO Andy Jassy said he was "very excited" about how its One Medical subscription is "continuing to grow." But in general, health care does seem to have been a tougher nut to crack than perhaps some expected. That's why Friday's report caught our eye because it shows Amazon is looking for ways to make progress and not being complacent with its organizational structures. Still, as of now, it's not a major needle-mover compared with the e-commerce, advertising and cloud-computing divisions. Meta's move: The founder of Scale AI, Alexandr Wang, confirmed that he's departing the startup to join Club name Meta Platforms , part of the Instagram parent's bold move to stay on the leading edge of artificial intelligence. When we wrote Wednesday about Meta investing nearly $15 billion to take a 49% stake in Scale AI, we were under the impression that Wang would join Meta's new "superintelligence" unit on top of his duties at the data-labeling startup. That is not the case. The new revelation underscores the aggressiveness of Meta CEO Mark Zuckerberg amid concerns that some of its AI technology was lagging in performance. Wang is well-known within the tech industry as a bright mind on AI — he founded Scale AI before he was 20 years old — and talent along with computing resources is very important in the AI race. Apple shipments: Rounding out these updates on Big Tech names, Reuters reported that 97% of the iPhones exported from India by manufacturer Foxconn went to the U.S. during the March-to-May period. That is a dramatic increase from the roughly 50% export rate in 2024, Reuters said, citing customs data. The reporting is a clear indication of Apple's strategy to navigate President Donald Trump's tariffs by relying less on China, which faces a much-higher duty rate than India. Up next: It's a quite week of earnings within the portfolio, though Lennar and Darden Restaurants are set to report on Monday and Friday, carrying implications for Club names Home Depot and Texas Roadhouse , respectively. Jabil, La-Z-Boy, GMS, Smith and Wesson Brands, Kroger, Accenture, and CarMax also report. The Federal Reserve's decision on interest rates and latest economic projections arrive on Wednesday. On the economic calendar, the latest numbers on retail sales and import/export prices are due out Tuesday morning, followed by initial jobless claims on Wednesday morning. Next Friday and into the weekend, the American Diabetes Associations' Scientific Sessions takes place, and Club name Eli Lilly will be there with updates. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
