Disney DIS 0.00%↑ reports 4Q22 earnings in about 12 hours.
Over the past 4 weeks consensus has been lowering their estimates, they are now expecting $0.505 EPS for 4Q22 - implying a 37% YoY increase from 4Q21.
While that might still seem aggressive to some, “normalised” 4Q EPS pre-covid was almost always above $1. To me, consensus is expecting a ~50% decrease in EPS from normalised levels.
The main drags are Hurrican Ian (expected to reduce profits by $100m), as well as lower content licensing sales (to reduce profits by another $100m).
My take is that parks will beat consensus’ expectations because attendance trackers show 2022 YTD attendance extremely close (or even marginally higher) than 2019 YTD numbers. Given that ticket prices are flat or slightly higher for peak periods, 4Q22 parks numbers should be better than expected.
Additionally, given the surprising Netflix NFLX 0.00%↑ results 3 weeks back, I think read-through to the Disney+ business should be positive. Analysts seem to have revised up their subscriber numbers since then though.
Leaning towards a beat, medium-level conviction.