Disney Stock Surges on Strong Q4 Results and Bullish Outlook

Walt Disney Co. (DIS) shares surged nearly 9% Thursday morning, following a strong fiscal fourth-quarter report that beat analyst expectations on both revenue and earnings. The media giant's robust performance, particularly in its streaming and film businesses, drove the rally. However, Disney's guidance for fiscal 2025 and beyond also played a crucial role in boosting investor confidence and the stock price.

Disney's revenue rose 6% to $22.6 billion in the quarter ended September 28, surpassing the $22.4 billion target set by Wall Street pros. Adjusted earnings per share soared 39% to $1.14, outpacing the 34% increase that analysts had forecast. The company's streaming business also showed significant improvement, with operating income growing to $321 million, up from $47 million in the prior quarter.

The company's film studio had a particularly strong quarter, with "Inside Out 2" and "Deadpool & Wolverine" driving a 39% increase in revenue for the content sales and licensing business. Disney's parks also saw increased spending by guests, contributing to record revenue for the experiences business.

Disney's guidance for fiscal 2025 and beyond also contributed to the stock's significant gain. The company projected high-single-digit adjusted EPS growth for fiscal 2025, with double-digit growth expected in fiscal 2026 and 2027. This rosy outlook, which exceeded analysts' expectations, reassured investors about Disney's long-term prospects.

Analysts have since raised their price targets, with the average target now at $110.67, representing a slight discount to current levels. However, the consensus recommendation among analysts remains a 'Buy,' indicating continued optimism in Disney's stock.

Disney's dividend growth and stock buyback plans also have a positive impact on the stock price and investor sentiment. By planning to grow dividends in line with earnings and initiating a $3 billion stock buyback program, Disney signals confidence in its future performance. Dividend growth provides steady income for investors, while stock buybacks reduce the number of outstanding shares, increasing earnings per share and potentially boosting the stock price.

In conclusion, Disney's strong fiscal fourth-quarter results, particularly in streaming and film releases, along with its bullish outlook for the future, drove the stock price increase Thursday morning. The company's guidance for fiscal 2025 and beyond, as well as its dividend growth and stock buyback plans, further boosted investor confidence in the media giant's long-term prospects.