Disney Earnings: Improved Streaming Results Come at the Expense of Continued Linear Weakness

Disney continued to make good progress on cost reductions and building a path to streaming profitability during its fiscal second quarter. However, promising streaming metrics coincided with a traditional television business that continues to struggle, and the firm provided a muted fiscal third-quarter outlook, especially for its experiences segment. Our concern remains with the bigger picture. Until Disney can show more progress on the collective streaming and linear television trend, we expect overall performance to remain muted. We’re maintaining our $115 fair value estimate.