Disney is set to report its quarterly earnings Tuesday after the closing bell, and one portfolio manager said it could have far-reaching implications for the market given the media giant's many different properties both in the U.S. and abroad.
"This is kind of a bellwether for so much of the U.S. economy," said Eddy Elfenbein, portfolio manager at AdvisorShares, referring to Disney's vast array of assets, which include broadcast, cable, movies and theme parks. "But what I'm going to be looking for is in their cable subsidiaries, [such as] ESPN," Elfenbein said Monday on CNBC's "Trading Nation."
ESPN has traditionally proved quite profitable for Disney, Elfenbein said, but has not fared well recently.
"They've been bleeding subscribers recently, and that's caused a lot of attention from Wall Street. So, I want to see how those numbers are, and how the ESPN business is shaking out," he said.
The stock itself hasn't been doing too well, Elfenbein pointed out. Indeed, Disney shares have declined 5 percent in the last three months and have underperformed the broader market this year.
"It's sort of rare to see a pullback like this in Disney. As far as the earnings report, I want to see how the revenues are at the different segments of their business. If they are impressive, and above expectations, then I think Disney is worth buying for investors right now. But, media-wise, I'm not a particular bull on the sector," he said.
Analysts largely give Disney a rating of "overweight," with an average price target of $117.38. This implies about 10 percent of upside for the now $106 stock. Shares of Disney closed lower on Monday.