Walt Disney Co (NYSE:DIS, XETRA:WDP) is expected to post a mixed performance in its first fiscal quarter, according to Bank of America analysts who project stronger growth in the latter half of the year.
The analysts wrote that the quarter “will reflect several moving parts in the underlying business.”
At the box office, Zootopia 2 performed strongly, but this was partially offset by softer results from other live-action releases.
In the company’s Experiences segment, attendance was weighed down by lower international visitor traffic at domestic parks, as well as costs related to cruise ship pre-openings and dry docks. “More positively, DIS is facing an easier fiscal Q1 comp from the hurricanes last year,” the analysts added.
Bank of America also highlighted Disney’s upcoming cruise launch, noting that the company is on track to debut its largest ship to date, the Disney Adventure, in March 2026.
The analysts expect “flattish attendance growth, low-mid single digit per-cap increases augmented by a few points contribution from new cruise ships in H2, all driving high single digit topline growth.”
Disney made headlines in December by entering a three-year content licensing deal with OpenAI’s Sora, which includes a $1 billion equity investment and access for the AI platform to over 200 of Disney’s characters. The analysts wrote that while the partnership is “unlikely to have a significant P&L impact near term,” it could increase engagement with the company’s iconic intellectual property over time.
Noting these factors, Bank of America modestly lowered its first-quarter revenue estimate to $25.06 billion from $25.11 billion, and operating income to $4.5 billion from $4.7 billion. Full-year operating income was also trimmed slightly to $19.5 billion from $19.6 billion, with EPS now projected at $6.61.
Despite the mixed start, the analysts reiterated a ‘Buy’ rating and a $140 price target on Disney, which traded up 3.3% at about $115 in the early afternoon on Monday.
They cited growth in direct-to-consumer offerings, a reacceleration in parks, and multi-year sports initiatives as key drivers, writing that these factors “cement ESPN’s role as the premium sports platform.”