Media giant and theme park operator Disney (DIS) is scheduled to report results of its fiscal third quarter after the market close on Wednesday, August 10, with a conference call scheduled for 4:30 pm ET. What to watch:

DISNEY+: On May 11, Disney reported what CEO Bob Chapek described as "strong results in the second quarter, including fantastic performance at our domestic parks and continued growth of our streaming services," though its earnings excluding items and revenue missed consensus expectations.

With its last quarterly update, Disney reported 137.7M paid subscribers for its Disney+ streaming service, up from 103.6M at the same time last year. The company also reported ESPN+ paid subscribers of 22.3M in Q2, versus 13.8M last year, and reported total Hulu paid subscribers of 45.6M, versus 41.6M a year prior.

On July 19, shares of Netflix (NFLX) advanced after the streamer announced better-than-expected Q2 subscriber losses. In a recent note to investors, JPMorgan analyst Doug Anmuth pointed out that Netflix shares have traded up 16% since the company reported Q2 earnings as the narrative shifts toward its improved free cash flow outlook and 2023 launches of the advertising supported tier and paid sharing, despite only "modest" subscriber growth expected in the second half of 2022. The analyst believes Netflix has urgency around both accelerating revenue growth and driving greater free cash flow, with the latter supported by flattish content spending over the next couple of years. He keeps a Neutral rating on Netflix shares with a $240 price target.

On Wednesday morning, RBC Capital analyst Kutgun Maral lowered the firm's price target on Disney to $150 from $176 to reflect the recent multiple compression across streaming and growth assets in the market but keeps an Outperform rating on the shares ahead of its Q3 report. The company's direct-to-consumer business should see a "solid quarter," while the content slate for Q4 is shaping up as "particularly robust", even though the looming reset to the management's Disney+ subscriber guidance of 230M-260M is likely not fully priced in, the analyst told investors in an earnings preview note. Maral added that Disney's Parks business should see continued momentum based on strong results from peers like Comcast-NBCU (CMCSA).

2. PARKS: On July 20, KeyBanc analyst Brandon Nispel lowered the firm's price target on Disney to $131 from $151 and kept an Overweight rating on the shares. His domestic geolocation data tracking Disney and Universal Theme Park attendance showed mixed results, with overall Disney attendance rebounding in June while overall Universal Studios' attendance was weaker. With his data not jumping off the page, in certain cases already showing rapid deceleration year-over-year, and the macro environment deteriorating, Nispel said he thought it was prudent to lower his Theme Parks estimates for both Disney and Comcast's Universal in Q2 and the remainder of 2022, which brought his 2023 assumptions lower as well and below consensus. However, he added that the time that he believed expectations likely had moved lower and thinks theme parks remain a key differentiator between Disney and Comcast relative to media peers, with the former his preferred way to invest in media.

3. SPORTS RIGHTS: On June 15, Evercore ISI analyst Vijay Jayant noted reports indicating that Viacom18, a joint venture between Reliance, Bodhi Tree, and Paramount (PARA), has outbid Disney for the digital streaming rights to the Indian Premier League, or IPL, though Disney had retained the linear TV rights. Though Jayant estimates about 25% of Disney+ Hotstar subscribers could be at risk of churning from the loss of IPL, Disney keeping the lower-risk, and "substantially more valuable," linear rights for the coveted Indian Cricket league demonstrated good financial discipline, the analyst told investors.

On June 30, Morgan Stanley analyst Benjamin Swinburne lowered the firm's price target on Disney as he lowered his Disney+ estimates to reflect lost IPL cricket rights in India and risk of a weaker consumer, Swinburne, who forecasts 220M subscribers in FY24, said that that time that he saw an attractive risk/reward at then-current levels, noting that Disney shares were down 40% year-to-date at that point and trading below the company's pre-Plus launch share price. He forecasts 20%-25% adjusted EPS growth for Disney over the next three years, Swinburne added.

Also in June, Alex Sherman and Jessica Golden of CNBC reported that Disney, Apple (AAPL), and Amazon (AMZN) had all submitted bids to become the new broadcast rights owner of the National Football League's out-of-market Sunday Ticket package, citing people familiar with the matter. The NFL continues to be in discussion with all three bidders as it decides which partner it will choose, sources told CNBC at that time.

In an appearance on the business news network on July 8, NFL Commissioner Roger Goodell said that the league's Sunday Ticket package will be moving to a streaming service and that a decision on rights for the package will be made by this fall.

In mid-July, Disney's ESPN announced its raising the price of its ESPN+ streaming service by 43% this month. The cost of an ESPN+ subscription will be increased to $9.99 a month from $6.99 starting on August 23, or to $99.99 a year from $69.99. ESPN said the price increase reflects the growing amount of live sports and original programming on the streaming service.

Earlier this week, Bloomberg's Gerry Smith reported, citing people familiar with the matter, that Paramount Global's CBS is nearing an agreement to pay about $350M annually for rights to broadcast certain Big Ten games after Disney's ESPN bowed out of the bidding. ESPN is ending a longtime relationship with the conference, though a deal hasn't been finalized, according to the report, which also noted that CBS will join Fox (FOXA) as a Big Ten broadcaster.

4. CONSENSUS: In terms of overall results for the third quarter, analysts are calling for Disney to report total revenue of $20.62B. The consensus Q3 earnings forecast stands at $1.00 per share, down from where it stood 90 days ago at $1.21 per share. For the September-end quarter, analysts' consensus currently calls for revenue of $21.2B and for the "House of Mouse" to post a profit of 85c per share, according to data from Refinitiv.

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