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Disney Stock: Q1 Results Due, Is Disney A Winner Or Loser Under Trump's Film-Tariff Plan?

As an investor keeping a close eye on the entertainment industry, I've been particularly interested in how The Walt Disney Company is navigating the current economic and political landscape. With the company's Q1 earnings report on the horizon and recent policy announcements from President Trump, there's a lot to unpack. In this newsletter, I want to break down what’s happening, what it means for Disney’s future, and how I’m thinking about my investment strategy around this iconic brand.

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Understanding Trump's Proposed Film Tariffs

President Trump's recent proposal to impose a 100% tariff on all foreign-produced films has sent ripples through the entertainment industry. The intention behind this move is to encourage domestic film production and revive Hollywood's prominence. However, the global nature of film production today means that such tariffs could have unintended consequences. Many U.S. studios, including Disney, often film abroad to take advantage of tax incentives, local talent, and lower production costs.

Implementing these tariffs could significantly increase production expenses and complicate international collaborations. For example, films like Avengers: Infinity War and Pirates of the Caribbean were partially filmed overseas. A policy like this might pressure companies to shift production back to the U.S., possibly sacrificing creative and economic advantages.

Disney's Q1 Performance Amidst Uncertainty

Despite the looming tariff concerns, Disney's Q1 fiscal 2025 results show resilience. The company reported a 5% increase in revenues, reaching $24.7 billion, up from $23.5 billion in the same quarter the previous year. Earnings per share also saw a significant rise, increasing by 35% to $1.40. These figures suggest that Disney's diverse portfolio, spanning from streaming services to theme parks, continues to perform well even in uncertain times.

Disney+ has maintained a solid subscriber base, aided by hit series from Marvel and Star Wars. Parks and experiences bounced back with international travel reopening, and merchandise sales remain strong thanks to franchises like Frozen, Toy Story, and The Mandalorian. These strengths help offset any temporary hits the company might take from increased film production costs.

Potential Impacts of the Tariffs on Disney

If the proposed tariffs are implemented, Disney could face increased costs for films produced overseas. This includes major franchises like Marvel, which frequently rely on international sets for their visual appeal and economic benefits. Higher production costs might lead to budget adjustments or shifts in filming locations. Studios might have to either absorb these costs or pass them on to consumers through higher ticket prices or streaming subscription fees.

Furthermore, retaliatory measures from other countries could affect Disney’s international box office returns. Countries like China, the U.K., and Germany—key markets for Disney films—might introduce counter tariffs or restrictions, making it harder for Disney to distribute and market films abroad. That could significantly dent revenue from international releases.

Another concern is the uncertainty it brings to co-productions and joint ventures with foreign studios. These relationships, which often provide funding and logistical support, could be at risk if the U.S. takes a more isolationist approach to entertainment trade.

Investor Takeaways

1. Diversification is Key: Disney’s strength lies in its wide-ranging business model. Its revenue doesn’t rely solely on movies—streaming, licensing, merchandise, and parks all contribute to its bottom line.

2. Stay Informed About Policy Shifts: Government decisions can impact markets in real time. It’s important to stay informed about potential legislation that could alter company operations.

3. Long-Term Brand Value Still Matters: Disney’s brand equity is enormous. Despite temporary challenges, it maintains a loyal audience and consistently produces valuable intellectual property.

4. Streaming Continues to Shine: With increasing content demand and global reach, Disney+ remains a strong growth area that may offset film-related headwinds.

5. Global Exposure Has Pros and Cons: While international markets boost revenue, they also increase exposure to political risks. That’s something to weigh in your portfolio.

What I’m Watching Next

Going forward, I’ll be paying attention to a few key developments:

• The final language and implementation of the film-tariff policy. Is it 100% across all films or will there be exceptions for partial foreign shoots?

• Disney’s response. Will they restructure their production pipeline, and how will this affect timelines and budgets?

• Market reactions to the next quarter. Will investors stay confident in Disney’s leadership?

• Reactions from other studios and the broader entertainment sector. How will competitors like Netflix, Warner Bros, and Universal respond?

This is one of those rare moments when politics and business collide in a very public and impactful way. If you're an investor in media stocks—or considering becoming one—it's crucial to understand both sides of the equation.

My Advice to You

Right now, I'm not rushing to sell my Disney shares. Instead, I'm using this time to reassess and stay vigilant. Here’s my personal approach:

• Hold core positions. Disney has shown time and again that it can weather storms.

• Avoid emotional decisions. Tariff news can cause knee-jerk reactions, but the fundamentals are still solid.

• Look for buying opportunities. If the stock dips on short-term news, it could be a chance to get in at a discount.

• Monitor Disney+ metrics closely. Streaming growth is key for future value.

Final Takeaways

Disney’s situation with the film tariffs is a great example of how macroeconomic policies can shape the future of even the most iconic companies. While the risks are real, so are the opportunities. The brand power, the diversification, and the global footprint are all strengths that can help Disney weather any political turbulence.

As always, my best advice is this: don’t chase the news. Follow the fundamentals. Stay calm. Stay curious. And stay committed to your long-term goals.

Thanks for reading—and I’ll keep bringing you the insights that matter.

[Live Life Grow Wealth]

DISCLAIMER

I make no representations, warranties, or guarantees, whether expressed or implied, that the content provided is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

I am an individual content creator and not regulated or licensed by the Monetary Authority of Singapore (MAS) as I do not provide investment services.

All forms of investments carry risks, including the risk of losing your entire invested amount. Such activities may not be suitable for everyone. You are strongly encouraged to seek advice from a professional financial advisor if you have any doubts or concerns.