03:05 PM EDT, 06/27/2024 (MT Newswires) -- Walt Disney ( DIS ) shares have been pressured over fiscal Q3 guidance that includes stable Experiences EBIT due to a number of one-time items, a return to Direct-to-Consumer losses and core subscriber declines, UBS Securities said in an earnings preview.

"While this also raised concerns on underlying demand for the parks, we expect growth at Experiences to rebound in F4Q as comparisons normalize," UBS analysts, including John Hodulik, said. "The rapid expansion of cruise capacity helps de-risk the medium term outlook."

UBS said Direct-to-Consumer business remains on track for profitability in Q4, with multiple strategies to drive margins, including password sharing and Hulu synergies.

Improved box office performance and cost management in linear entertainment are expected to contribute to a significant earnings increase through fiscal 2026, the analysts said.

UBS said advertising trends in sports are projected to remain strong as the business benefits from major events like the Stanley Cup Finals and International Cricket Council World Cup amid mixed National Basketball Association playoff ratings.

UBS reiterated its buy rating on the stock with a price target of $130.

Price: 102.00, Change: -0.18, Percent Change: -0.18