The Zacks Consumer Discretionary sector has primarily struggled in 2022, down more than 30% and widely underperforming the S&P 500.

A titan in the realm that many are familiar with, The Walt Disney Company (DIS - Free Report), has seen its near-term earnings outlook shift to the negative over the last several months, landing the stock into a Zacks Rank #5 (Strong Sell).

Image Source: Zacks Investment Research

Disney has a broad portfolio of assets encompassing movies, television, publishing, and theme parks. The company’s premium streaming service, Disney+, has been a hit among consumers and has been a big growth driver.

Let’s take a closer look at how the company stacks up.
 

Share Performance & Valuation

DIS shares have struggled to find their footing over the last three months, down more than 15% compared to the S&P 500’s marginal 0.7% gain.

Image Source: Zacks Investment Research

Currently, DIS shares trade at a 1.9X forward price-to-sales ratio, below its 3.1X five-year median and above its Zacks sector average of 1.6X.

Image Source: Zacks Investment Research

Disney carries a Style Score of a “D” for Value.
 

Growth Outlook & Quarterly Performance

Although the company has witnessed negative earnings estimate revisions, DIS still carries a respectable growth profile; earnings are forecasted to climb 15.6% in its current fiscal year (FY23) and a further 32% in FY24.

The projected earnings growth comes on top of forecasted year-over-year revenue upticks of 9.9% in FY23 and 6.3% in FY24. Disney sports a Style Score of a “B” for Growth.

Additionally, Disney has primarily posted mixed earnings results across its last four releases, falling short of revenue and earnings estimates twice across this timeframe.

In its latest release, DIS fell short of bottom-line expectations by 40% and revenue estimates by 4.5%. Below is a chart illustrating the company’s revenue on a quarterly basis.

Image Source: Zacks Investment Research
 

Bottom Line

Mixed earnings results and negative earnings estimate revisions from analysts paint a challenging picture for the company in the near term.

The Walt Disney Company (DIS - Free Report) is a Zacks Rank #5 (Strong Sell), indicating that analysts have lowered their bottom-line outlook across the last 60 days.

For those seeking strong stocks, a great idea would be to focus on stocks carrying a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy) – these stocks sport a notably stronger earnings outlook paired with the potential to deliver explosive gains in the near term.

More By This Author:

General Mills Earnings Expected To Grow: Should You Buy?
Adobe To Post Q4 Earnings: What's In The Offing?
Oracle Surpasses Q2 Earnings And Revenue Estimates