Walt Disney Co. (NYSE:DIS) heads into its May 7, 2025 earnings report on a volatile note, with its stock down nearly 22% from this year’s highs but rebounding 16% from April lows.
Investors are bracing for another eventful session as the company faces macroeconomic headwinds, shifting consumer trends, and new industry pressures.
Key Expectations for Disney’s Q2 Earnings
- Revenue: Consensus forecasts call for revenue of about $23.1 billion, up roughly 5% year-over-year. This would mark continued top-line growth, albeit at a slower pace than some prior quarters.
- Earnings: Adjusted earnings per share are expected to come in around $1.19–$1.21, flat to slightly down from last year, and a step down from last quarter’s $1.76.
- Disney+ Subscribers: Analysts anticipate a modest decline in Disney+ subscribers, with consensus estimates at 123.6 million, down from 124.6 million last quarter. This follows management’s warning of a “modest decline” after recent price hikes and the end of a key distribution deal in France.
Division Highlights and Challenges
- Parks, Experiences & Products: Disney’s theme parks and resorts, historically a profit engine, are under pressure from softer US tourism and the fading post-pandemic travel boom. Last quarter, US park operating income fell 5% due to hurricanes and cruise ship launch costs. Still, Disney expects 6–8% full-year operating income growth for parks, banking on strong cruise bookings and new attractions.
- Direct-to-Consumer (Streaming): Disney’s streaming business is a bright spot, with price increases and password-sharing crackdowns driving profitability. The segment turned a $293 million profit last quarter, its third consecutive quarter in the black. However, higher prices could weigh on subscriber growth.
- Studio & Entertainment: The studio division remains a wild card. While Marvel’s Thunderbolts outperformed at the box office, new US tariffs on foreign-made films and rising competition from rivals like NBCUniversal’s Epic Universe could pressure margins and market share.
Macro Risks and Market Sentiment
Disney’s earnings come as the company navigates a challenging macro environment. New tariffs imposed by the Trump administration have heightened recession fears, and nearly all of Disney’s businesses-from parks to streaming to advertising-are sensitive to shifts in consumer discretionary spending. Analysts warn that a US recession could weigh on both park attendance and ad revenues in the second half of the year.
Despite these risks, analyst sentiment remains cautiously optimistic. Most rate Disney a “buy” or “hold,” with an average price target of $120-about 30% above current levels. The options market is pricing in a post-earnings move of around 6%, reflecting expectations for significant volatility.
What to Watch After the Bell
- Updates on Disney+ profitability and subscriber trends
- Management commentary on park attendance and cruise bookings
- Impact of tariffs and economic uncertainty on forward guidance
- Studio pipeline and competitive positioning vs. streaming and theme park rivals
Disney’s stock has been on a rollercoaster in 2025, and today’s earnings could set the tone for the months ahead. Investors should expect a focus on streaming profitability, resilience in the parks business, and management’s outlook amid rising macroeconomic uncertainty.
With volatility running high, Disney’s results and guidance will be closely watched by Wall Street and Main Street alike.