Global media and entertainment company, The Walt Disney Company DIS is set to release second-quarter fiscal 2019 results on May 8, after market close. The company has gained nearly 26.5% in the past three months. The momentum is expected to be maintained as the company is working hard on shaping 2019 as a transformative year by completing the 21st Century Fox acquisition and Disney+ streaming service launch.

Inside Our Methodology

Disney has a Zacks Rank #4 (Sell) and an Earnings ESP of +1.45%. According to our surprise prediction methodology, the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) stock with a positive Earnings ESP increases the odds of an earnings beat. Meanwhile, a Zacks Rank #4 or 5 (Strong Sell) stock is best avoided going into the earnings announcement, especially when the company is seeing negative estimate revisions. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Disney’s earnings estimates were revised downward over the past 30 days for the soon-to-be-reported quarter. It is expected to see an earnings decline of 14.1% year over year but revenues are likely to increase 0.2%. Disney’s earnings surprise history is robust with the company delivering positive earnings surprise of 8.7% on average with earnings beats in three of the last four quarters. The stock belongs to a bottom-ranked Zacks Industry (bottom 21%) and has a Growth Score of B.

What to Watch?

Disney has been hogging the limelight with the release of Marvel Studios' new action movie — Avengers: Endgame. This is especially true as the movie broke box-office records hitting the billion-dollar mark in just five days (read: Avengers Endgame Smashes Box Office Records: Buy Disney ETFs).

Also, the company is progressing steadily with the acquisition of Fox’s major assets for $71 billion. The company is expected to gain from extending its demand-based pricing strategy to multi-day tickets for better managing customer attendance within the Parks & Resorts business. The move is expected to distribute demand throughout the year to prevent fluctuations in revenues and enhance services by reducing wait time. In turn, these changes are expected to result in attendance growth and improved per capita spending.

However, persistent streaming technology service losses may hurt the second-quarter top line.

ETFs in Focus

Given this, ETFs with the highest allocation to the social media giant will be in focus going into its earnings announcement. These funds are potential movers if Disney comes up with a positive earnings surprise. While there are several ETFs in the space with DIS in their basket, we have highlighted funds that have high exposure to this global media and entertainment company (see: all the Consumer Discretionary ETFs here):