The series of major cost-cutting moves at Walt Disney (DIS) under CEO Bob Iger won’t readily improve fiscal 2023 second-quarter results, which come out after the closing bell Wednesday. The entertainment giant will need at least another quarter to see meaningful benefits to profitability from Iger’s turnaround plans. Disney is expected to report a 13.8% year-on-year drop in earnings-per-share (EPS) for its fiscal 2023 second quarter, to 93 cents, according to consensus estimates from Refinitiv. Revenue should rise 7.5% annually, to $21.8 billion, Refinitiv data showed. Back in February, Disney had several surprises in store for investors when it delivered a stronger-than-expected fiscal first quarter and narrowed losses in direct-to-consumer (DTC) streaming. Alongside earnings and just months after returning as CEO, Iger also announced a $5.5 billion cost savings target, which included thousands of layoffs. He reorganized Disney’s divisions into Entertainment, ESPN, and Parks, Experiences and Products. Financial results will reflect the new business structure by the end of the fiscal year. Iger also laid out a path to reinstating Disney’s dividend by the end of the calendar year. The dividend was suspended in 2020 due to the Covid-19 pandemic. However, Jim Cramer suggested Monday that Disney’s cost reduction efforts have not yet reached an inflection point. “This is not the Disney quarter,” he added. “It’s about the quarter of rationalization, not a story of growth.” Similarly, Deutsche Bank said that Disney is a second-half story. We expect cost reduction initiatives to really start to kick in during the June and September quarters, driving loss improvement in streaming,” analysts at the bank wrote in a recent note. The analysts increased their 12-month price target on Disney stock to $135 per share, from $130, and reiterated a buy rating. DIS YTD mountain Disney’s stock performance year-to-date. As Disney repositions its priorities and corporate strategy to cope with a difficult economy, Wall Street expects some areas of business growth to be subdued, such as its streaming operations that include Hulu and Disney+. In terms of how streaming stacks up to the competition, an apples-to-apples comparison would be Disney+ versus Netflix (NFLX). For its fiscal second, which ended in March, Disney+ is expected to have add 1.7 million subscribers for a total of 163.5 million, compared to a loss of 2.4 million in the prior quarter. Netflix, which reported its March quarter last month, added 1.75 million subscribers for a total of 232.5 million. Netflix gained 7.66 million in the prior quarter. Disney’s average revenue per user (ARPU) for its March quarter is expected to be $4.40. Netflix’s ARPU in its March quarter was slightly lower than expected, at $11.70. Morgan Stanley, in a note Monday, said it believes Disney+ has “room to ramp its ad-free tier further” and expects Disney+’s ad-supported tier to be “accretive to overall ARPUs over time while maintaining a lower entry price point for more price-sensitive consumers.” Reflecting that longer-term view and Iger’s cost-cutting plans, the analysts raised their price target to $120 per share, from $115, and kept an overweight, or buy, rating on the stock. In the near term, Morgan Stanley’s Disney outlook is mixed. For the upcoming results Wednesday, the analysts are lowering their overall DTC revenue outlook on “lower Disney Plus net additions, lower average revenue per user expectations and lower revenues at Hulu.” But Morgan Stanley is raising second-quarter revenue estimates for Disney’s Parks, Experiences and Products division, which had a knockout fiscal first quarter of $8.7 billion, a 21% year-over-year increase. Deutsche Bank also sees “more outsized growth” in Disney’s parks segment in 2023 as consumer activity in international resorts normalizes in a post-pandemic economy and domestic parks continue to show strength. Bottom line We’re pleased with Iger’s restructuring efforts to streamline the organization. Despite our 1 rating on the stock, which has gained nearly 18% year-to-date, we don’t think there’s a rush to buy shares ahead of Wednesday’s quarterly release. It may take another quarter or so for Disney’s $5.5 billion cost-reduction plan to make a difference to the bottom line. Rather, we think the prudent course of action is to wait until after the numbers to make any decision on whether to buy shares. We should be able to better gauge how the business is performing and get a more accurate sense of the timeline for a rebound in growth given the series of big changes happening at the company. Longer-term, we continue to think the stock is worth more and can go higher once the streaming business pivots to profitable growth. We also consider Disney undervalued given its diverse businesses across media, parks, cruises and movies. Our concern at the moment is timing, not the longer-term fundamentals of this best-in-class business. (Jim Cramer’s Charitable Trust is long DIS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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The series of major cost-cutting moves at Walt Disney (DIS) under CEO Bob Iger won’t readily improve fiscal 2023 second-quarter results, which come out after the closing bell Wednesday. The entertainment giant will need at least another quarter to see meaningful benefits to profitability from Iger’s turnaround plans.