• Matthew Mancini

Top Earnings Reports of the season: DIS and WFC

Updated: Feb 20


Images above show a sign outside of a Wells Fargo bank on the left and famous Disney castle on the right (Sources: Forbes & MTV)


Disney

The Walt Disney Corporation (NYSE: DIS) reported its earnings on Thursday. Disney’s Earnings Per Share (EPS) was $0.32 adjusted which beat analyst estimates of $0.43, according to Investopedia. Their revenue of $16.45 billion surpassed expectations of $15.9 billion, according to CNBC.


Disney reached 94.9 million subscribers to its streaming platform Disney+ as of January 2nd. Since the service launched in 2019, it has been a major competitor to larger streaming services like Netflix (NASDAQ: NFLX), Amazon’s (NASDAQ: AMZN) Prime Video, and Apple’s (NASDAQ: AAPL) Apple TV. Disney also saw a bump in its other platforms, ESPN+ and Hulu, with the latter seeing a 26% growth in its average monthly revenue per paid subscriber.


Now, Disney shares have increased 37% over the past three months whereas the Dow Jones Industrial Average has only seen a 7% increase. According to MarketWatch, Disney stock fell on Friday as analysts on Wall Street think there is too much optimism for the streaming platform.


Wells Fargo

Wells Fargo & Company (NYSE: WFC) saw a $0.64 EPS for Q4 2020 compared to the Zacks Consensus Estimate of $0.59. The higher earnings can be attested to cost savings initiatives and the release of their financial reserves.


The bank only generated 3.3 billion in profit in 2020, down 83% from 2019, and lowered its dividend by 80%, according to NASDAQ. Currently priced at $33.53 per share, WFC has a Return on Equity of 0.93% which is worse than 90% of companies in the banking industry with a median of 10.83%.


However, the bank performed well in stress tests by the Fed back in December which looks at how banks perform under a hypothetical recession. Wells Fargo also has a decent valuation ranking with a price-to-book ratio of 0.85 which is slightly higher than 58% of its industry and a price-to-sales ratio of 1.91 which is better than 66% of its industry.