Will Disney's Earnings Be Dramatic?

• In a report issued Tuesday, RBC Capital Markets shared a preview of Walt Disney Co DIS’s upcoming earnings report.
• The firm maintained an Outperform rating and $130.00 target price on the stock.
• Shares of Walt Disney were up about 0.5 percent on Tuesday.

RBC analysts led by David Bank looked into Disney ahead of its earnings call. The company is "on the eve of two seminal catalysts":

• The re-launch of the "Star Wars" franchise.
• The inauguration of its first amusement Park in Mainland China.

Related Link: Watch: Disney Finally Unveils 'Star Wars: The Force Awakens' Trailer

Moreover, "Its deep pipeline of IP driving momentum at the Studio and Consumer Products divisions and premier core media franchises suggest a premium multiple to Media stocks." However, ecosystem pressures could generate volatility.

The report highlights a few key points to take into account:

• RBC anticipates management will sound slightly more “Business as Usual” in the earnings call. Moreover, they expect the impact of the changing media landscape on expectations for Disney’s Domestic Cable business to be "more measured near-term than some might have feared."
• Analysts believe ESPN "will manage non-programming expenses to maintain margin integrity in the face of modest cord cutting revenue pressure."
• Channel checks suggest Disney’s domestic parks are crowded and wait times are unusually long. This makes them feel quite confident in the soon-to-be-announced results.
• Checks also indicate that advertising will probably be stable heading into 2016.
• "With expectations for the upcoming Star Wars to be amongst the top-3 grossing films of all time (globally), it will be hard to generate upside and a tough ‘sentiment’ trade up with expectations this high. But longer-term, expect to hear more about cross monetization in Parks, Consumer Products and even ABC, highlighting long-term value."

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.