An existential threat that Disney's results didn't mention a word about
Disney turned in its best quarter in years and analysts see the stock 20% higher. But thirteen days later, the same company was in court talking about an "existential threat". Both versions can't be true at once — and it will be decided sooner than most investors suspect.
Key points
Disney turned in its best quarter in years, and thirteen days later it was in court talking about an existential threat
In an hour-long call with analysts, the words FCC or license were never mentioned, and no analyst asked
Eight ABC stations in the largest U.S. markets were ordered by the regulator to seek early license renewal, for the first time in 50 years
Disney stopped separately reporting linear TV profit this year, exactly when they became a target
Analyst consensus targets $128, Bulios's model is below the current price, and one date on the calendar will settle it
The best quarter in a long time and a word nobody uttered
In early August, The Walt Disney Company $DIS had reason to celebrate. For the third fiscal quarter, it reported revenue of $25.2 billion, up 7% year-over-year, and total segment operating income jumped 21% to $5.6 billion. Adjusted earnings per share reached $2.06 versus expectations of $1.86. Parks posted a record $10 billion in quarterly revenue, the company confirmed its full-year guidance, and raised its share buyback plan to at least $9 billion.
The conference call with analysts lasted about an hour. They talked about Toy Story 5, about ESPN, about cruise ships, about ticket prices. But in the entire transcript of the call, the words FCC, license, or Trump never appeared once. No one from management said them. No analyst asked.
Thirteen days later, the same company filed a lawsuit in federal court in Washington, in which the regulator's actions are described as an existential threat. The stock trades around $105, and market capitalization is around $190 billion. The analyst consensus targets $128. One of those two versions of reality - the calm call or the dramatic lawsuit - is wrong.