Guggenheim analysts tweaked their Walt Disney (NYSE:) model, reflecting a slightly more cautious outlook for the company’s Experiences segment (parks, cruises, etc.) in a note Wednesday.
The firm revised its F3Q Experiences revenue growth forecast down to 6.2% from 8.2% but still anticipates improvement to 6.7% in F4Q.
Despite the revision, Guggenheim expects F3Q adjusted segment operating income to remain in line with management’s mid-to-high-single-digit growth guidance.
“Our F4Q Experiences adjusted segment OI growth of 9.0% is modestly below management’s prior ‘double-digit’ expectation,” Guggenheim noted, citing their updated Parks data analysis.
However, Guggenheim isn’t all doom and gloom for Disney. They raised their theatrical forecasts due to the strong performance of “Inside Out 2,” and adjusted their Direct-to-Consumer (DTC) estimates to account for higher Hotstar cricket rights costs.
These adjustments resulted in a slightly lower F3Q total company revenue projection of $23.2 billion, but segment operating income remains largely unchanged at $3.8 billion.
Despite the moderation in its Parks outlook, Guggenheim maintains a Buy rating for Disney and a $140 price target.
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