How Will Walt Disney Stock React To Its Upcoming Earnings?

Walt Disney (NYSE:DIS) is set to report its earnings on May 7, 2025. Consensus projects that revenues will rise by about 5% year-over-year to $23.1 billion, while earnings are projected to come in at $1.21 per share, roughly flat compared to last year. We expect the company’s Experiences division, which operates Disney’s parks, resorts, and cruise lines, to face some headwinds due to lower tourism in the U.S. and easing of the post Covid-19 boom. However, the Direct-to-Consumer media business could fare well, driven by incremental user adds and stronger per-user pricing. That said, investors will be more focused on Disney’s outlook. New tariffs imposed by the Trump administration have raised the probability of a U.S. recession this year. Nearly all of Disney’s operations – ranging from theme parks to cruises to video streaming and TV advertising- are dependent on discretionary spending, which could take a hit during a recession.

Disney has $165 billion in current market capitalization. Revenue over the last twelve months was $93 billion, and it was operationally profitable with $13 Bil in operating profits and net income of $5.6 billion. That said, if you seek upside with lower volatility than individual stocks, the Trefis High-Quality portfolio presents an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

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Walt Disney’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 9 positive and 11 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 45% of the time.
• However, this percentage decreases to 42% if we consider data for the last 3 years instead of 5.
• Median of the 9 positive returns = 4.9%, and median of the 11 negative returns = -2.6%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

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

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

Is There Any Correlation With Peer Earnings?

Sometimes, peer performance can have influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of Walt Disney stock compared with the stock performance of peers that reported earnings just before Walt Disney. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.

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