Media giant and theme park operator Disney (DIS) is scheduled to report results of its fiscal fourth quarter after the market close on Tuesday, November 8, with a conference call scheduled for 4:30 pm ET. What to watch: 

DISNEY+: On August 10, Disney reported what Chief Executive Officer Bob Chapek described as "an excellent quarter" with earnings excluding items and revenue that beat consensus expectations. "With 14.4 million Disney+ subscribers added in the fiscal third quarter, we now have 221 million total subscriptions across our streaming offerings," said Chapek.

With its last quarterly update, Disney reported 152.1M paid subscribers for its Disney+ streaming service as of July 2, up from 116.0M at the same time last year. The company also reported ESPN+ paid subscribers of 22.8M in Q3, versus 14.9M last year, and reported total Hulu paid subscribers of 46.2M, versus 42.8M a year prior.

On October 19, shares of Netflix (NFLX) advanced after the streamer reported upbeat Q3 results, including better-than-expected paid membership additions.

Afterward, Deutsche Bank analyst Bryan Kraft upgraded Netflix to Buy from Hold with a price target of $350, up from $270, following the report. The analyst sees visibility into a subscriber growth inflection point next year given that Netflix management has confirmed both the early 2023 introduction of its new measures designed to better monetize account sharing, and the early November timing of its advertising-based video-on-demand tier launch in 12 top markets.

JPMorgan analyst Doug Anmuth also upgraded Netflix to Overweight with a price target of $330, up from $240, coming out of the Q3 results, citing increased conviction in Netflix's ability to accelerate revenue growth with the help of advertising and monetization of account sharing. He was encouraged that Basic With Ads unit economics should be at least neutral across all markets, and "significantly accretive" in large ad markets such as the U.S., with an even greater positive impact to revenue and operating profit, the analyst stated.

On October 26, KeyBanc analyst Brandon Nispel lowered the firm's price target on Disney to $143 from $154 and kept an Overweight rating on the shares. The analyst noted that Disney's traditional Media business is exposed to negative macro trends, but its focus on sports positions it favorably. Nispel further believes Disney has established a platform of streaming services that allows for the transition of subscribers from linear to streaming that's difficult for others to replicate. Despite attendance trends at parks softening, he thinks Disney parks are resilient and provide significant cash to help fund the transition to streaming.

Earlier in the quarter, BofA analyst Jessica Reif Ehrlich lowered the firm's price target on Disney to $127 from $144 to reflect contraction in market multiples and kept a Buy rating on the shares. She also lowered her estimate of fiscal Q4 revenue to $21.7B from $22.2B to reflect lower projected Disney+ net adds of 8M, down from 15M previously, along with lower content sales/licensing revenue and the impact of Walt Disney World closures for Hurricane Ian.

PARKS: On October 12 the LA Times' Hugo Martin reported that Disneyland is raising prices by up to 9% for single-day tickets and 11% for preferred parking. Additionally, prices for the new Genie+ service, which allows visitors to skip long lines on some of the most popular attractions, are also being raised by up to 25%, the report noted. The price increases come a year after the theme park raised daily ticket prices up to 8% and daily parking rates by 20%, and just two months after the resort raised prices for annual passes by up to 16%, the Times noted.

On October 24, UBS analyst John Hodulik lowered the firm's price target on Disney to $135 from $145 but keeps a Buy rating on the shares. The company's Q4 results should show continued strength in Parks and sequentially better DTC subscriptions, the analyst told investors. Hodulik added that while he is more cautious of trends in a potential recession as the effects at parks are typically felt later in the downturn, Disney's forward bookings remain strong, and he expects segment revenues to grow 14% in FY23.

SPORTS BETTING: In September, activist investor Daniel Loeb, the founder and chief executive of Third Point, backed off from pushing Walt Disney to spin off ESPN, saying he has a "better understanding" of ESPN's potential for the company's growth. "We have a better understanding of @espn's potential as a standalone business and another vertical for $DIS to reach a global audience to generate ad and subscriber revenues. We look forward to seeing Mr. Pitaro execute on the growth... and innovation plans, generating considerable synergies as part of The Walt Disney company," Loeb said in a series of tweets. He also shared an article by the Financial Times titled "Dan Loeb pulls back from call for Disney to spin off ESPN."

Disney Chief Executive Officer Bob Chapek said at the time that the ESPN sports networks are critical to his overall vision of the company, one that involves more direct connections to consumers, including wagering on sports, Bloomberg's Christopher Palmeri and Thomas Buckley reported. "Sports betting is a part of what our younger, say, under-35 sports audience is telling us they want as part of their sports lifestyle," Chapek said in an interview at Disney's D23 fan event in Anaheim, California. Asked if the company was developing an ESPN sports-betting app, Chapek said that, "We're working very hard on that."

More recently, on October 6, Action Network's Darren Rovell reported, citing sources, that DraftKings (DKNG) and Disney's ESPN were near signing an exclusive partnership. ESPN was seeking a partner in hopes of securing $3B over a period of time that would lead to a sportsbook rebranding itself with the ESPN brand, but that's not the case with this deal, as the agreement is a massive exclusive partnership that will have shows and perhaps odds integrated into game broadcasts, Rovell said.

CONSENSUS: In terms of overall results for the fourth quarter, analysts are calling for Disney to report total revenue of $21.36B. The consensus Q4 earnings forecast stands at 57c per share, down from where it stood 90 days ago at 85c per share. For the December-end quarter, analysts' consensus currently calls for revenue of $24.5B and for the "House of Mouse" to post a profit of $1.24 per share, according to data from Refinitiv.

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