Disney stock surges as rare 3-year forecast sees strong profit growth ahead

• Disney's stock rose 8% Thursday after upbeat earnings and a rare three-year guidance update.
• The company beat estimates for revenue and earnings-per-share.

Disney stock shot up 8% on Thursday after the entertainment giant reported earnings that beat estimates and surprised investors with guidance that gave a strong outlook for the next three years.

The stock traded 8.4% higher around 10:45 a.m. ET, at $111.05 a share.

The company beat revenue estimates for the third quarter, reporting $22.57 billion, versus estimates of $22.45 billion. Earnings per share came in at $1.14 versus estimates of $1.10.

The outlook provided to investors was also a big highlight of the report.

The guidance update is rare for Disney, which usually doesn't provide forward earnings forecasts. The three-year timeframe is also significant, since most companies rarely make forecasts further out than one year, and many don't provide guidance at all.

The company forecasts high single-digit earnings-per-share growth for the next fiscal year and an $875 million increase in operating income for its streaming division. For the 2026 and 2027 fiscal years, the company projects double-digit earnings growth.

"Thanks to the significant progress we've made, we have emerged from a period of considerable challenges and disruption well positioned for growth and optimistic about our future," CEO Bob Iger said in a statement.

The company's streaming unit—which includes Disney+, ESPN+, and Hulu—saw a quarterly profit of $321 million, far outpacing a loss of $387 the year prior.

The profits follow years of heavy investment amid a tense streaming war with competitors like Netflix, Max, and Paramount+.

Its TV networks, meanwhile, comprised of ABC and cable channels like the Disney Channel and Freeform, saw profits fall 38% to $498 million, while revenue dropped 6% to $2.5 billion.

The company's theme park and cruise profits also slowed, falling 6% from the year before to an operating income of $1.66 billion amid rising costs after launching two new cruise ships, plus slowing foot traffic at international parks like Disneyland Paris.

Spending and attendance at US parks remained strong, though, the company said.

Bank of America analysts maintained their bullish outlook for the stock following the report. They reiterated their "buy" rating and $120 price target, which would represent almost 8% upside from current levels.

"DIS has a collection of best-in-class premiere assets (in content/IP as well as Theme Parks). Near term catalysts include: 1) profitability inflection in DTC and 2) reacceleration in parks business," Bank of America analyst Jessica Reif Ehrlich wrote in a note.