Movies/Entertainment · #23 in the Retail 100

Disney

DIS

Our rating: hold
12-month target: $132.98 +16.5%
Expected vs. S&P 500: -0.7 ptsSee the math
Next earnings: Nov 17In 12 daysEarnings calls page ↗

A one-time $100M tariff refund supplied 4 points of the 20% profit growth in Disney's parks, which now earn over half its profit.

Summary

Disney earns money from the same characters in films, streaming, TV and merchandise, but most of its profit now comes from parks and cruises. That side is growing and streaming is now solidly profitable, while ESPN's profit is falling as sports rights get more expensive. The stock trades at about 14 times expected fiscal 2027 earnings, a price that assumes the growth will not last.

$114.18

+$2.22 (+1.98%)Past year

What Disney does

Disney makes movies and shows, then earns from the same characters in streaming, TV, theme parks and merchandise. Parks, cruises and merchandise bring in 38% of revenue but 57% of segment operating profit.²⁵

What it sells

Parks and experiences38% of revenue, FY2025
Disney World, Disneyland, parks abroad, Disney Cruise Line and licensing characters for toys and clothes. Disney's most profitable business.
Disney+ and Hulu26% of revenue, FY2025
Streaming subscriptions and ads, with about 132 million paid Disney+ subscribers. Profit is still small, about 5% of revenue.
ESPN17% of revenue, FY2025
Sports channels and the ESPN app, paid for by TV distributor fees and ads. It pays leagues like the NFL and NBA for games.
TV channels10% of revenue, FY2025
ABC, Disney Channel, FX and National Geographic. Shrinking as people cancel cable, but it still keeps about a third of revenue as profit.
Films and licensing9% of revenue, FY2025
Box office, home video and selling shows to other outlets. Marvel, Pixar and Star Wars films feed the rest of the business.

Who buys it

Mostly households: park guests, streaming subscribers and pay-TV customers, whose cable or satellite companies pay Disney per subscriber. Subscription and those TV fees were 40% of FY2025 revenue and advertising 12%. The Americas were 81% of revenue.

Where you've seen it

ESPN, ABC, Hulu, FX and National Geographic all belong to Disney, along with Marvel, Pixar and Star Wars.

The backstory

Disney's old profit engine, cable TV and ESPN, is shrinking as viewers cancel cable and sports rights get pricier. So Disney is leaning on what is growing: parks, cruises and consumer products earned 61% of its business profit over nine months. It plans to spend about $60B over ten years on parks and ships while cutting TV jobs.

How the business makes money

Why Disney's characters pay off most at the parks^2,9,10,22

Step 1
Hit films like Toy Story 5, which passed $1B at the box office, keep the characters fresh.
Step 2
Those films fill Disney+ and Hulu and sell toys. Streaming profit more than doubled last quarter to $712M.
Step 3
Fans pay the most at parks and cruises, where Disney keeps about 30¢ of each $1 of sales after running costs.
Step 4
Park profits fund new rides and ships, about $60B over ten years, while ESPN's profit falls as sports rights cost more.
What shareholders get
Remaining cash buys back stock, at least $9B in fiscal 2026, so each remaining share owns more of the profit.

Advantages

Parks and cruises no rival can match

Major advantage

Disney's biggest advantage. Experiences earned $3.0B of operating profit last quarter, about five times what Comcast's parks earned before depreciation.^1,12

Characters that earn money everywhere

Strong advantage

Hard to copy. A Disney film earns money in theaters, on Disney+, in stores and in the parks. Netflix and Paramount mostly earn once, on screens.²

ESPN's sports rights

Supporting

Valuable, but costly. ESPN holds NBA, NHL, NFL and college football rights and had its most-watched fiscal third quarter since 2016. The rising cost of those rights is shrinking sports profit.²

What's changing

A new CEO from the parks side is cutting TV costs

Josh D'Amaro, who ran parks and cruises, replaced Bob Iger as CEO in March 2026 and is cutting costs. The Wall Street Journal reports Disney plans to merge ABC, Hulu Originals and other TV units and cut hundreds of jobs. Disney has also agreed to sell its A+E stake for about $1.2B and is adding cruise ships, tilting the company further toward parks.^2,6,7,24

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with Walt Disney
Walt Disneythis stock	$197.25B	Disney makes movies and shows, then earns from the same characters in streaming, TV, theme parks and merchandise. Parks, cruises and merchandise bring in 38% of revenue but 57% of segment operating profit.
NetflixNFLX	$262.37B	Pure streaming service, spending heavily on shows and films for subscribers worldwide.	Netflix streams more profitably; Disney adds parks, merchandise and live sports.¹¹
Comcast (Universal, NBC, Peacock)CMCSA	$78.30B	Cable and internet company that also owns Universal parks, NBC and Peacock.	Comcast's parks are about a quarter the size of Disney's Experiences business.^12,13
Paramount Skydance (with Warner Bros. Discovery)PSKY	—	Paramount studio and CBS, now buying Warner Bros. Discovery for HBO and CNN.	Paramount bets on scale through debt-funded deals; Disney owns parks it lacks.^14,23

Leadership

Who runs the company, and how the stock has done under the CEO.

DIS +15.7%S&P 500 +14.9%Total return with dividends since Mar 2026

Josh D'AmaroCEO7 mo

Hugh JohnstonSenior EVP and CFO2.8 yrs, since 2023

Dana WaldenPresident and Chief Creative Officer7 mo

When D'Amaro was named (Feb 2026), the stock moved -0.2% that day; the S&P 500 moved -0.8%.

Wall Street on D'Amaro: PositiveGuggenheim rates it a Buy, saying Disney under D'Amaro is on track to hit its profit forecasts for fiscal 2026 and 2027. Bernstein also rates it a Buy, citing management's shift to steadier growth paid for by cost cuts.^L5,L6

Leadership sources (6) · researched Oct 2026

L1Josh D'Amaro Named Next Chief Executive Officer of Disney · The Walt Disney Company, 2026-02-03
L2Disney names Josh D'Amaro as its new CEO · NPR, 2026-02-03
L3Bob Iger hails 'one of the best CFOs in America' joining Disney: Hugh Johnston of PepsiCo · Fortune, 2023-11-06
L4Before Disney named a new CEO, it made sure the CFO was staying · Fortune, 2026-03-19
L5Guggenheim reiterates Buy rating on Disney stock citing CEO vision · Investing.com, 2026-09-28
L6Bernstein reiterates Disney stock rating on steady growth outlook · Investing.com, 2026-10-06

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Can parks and streaming offset ESPN's falling profit and lift adjusted earnings per share at least 10% in fiscal 2027, excluding fiscal 2026's extra week?^1,2,15,17,19

Bull case: why buyers buy

Parks grow near 10% and streaming margins keep widening, so earnings grow double digits and the valuation, about 14 times expected fiscal 2027 earnings, climbs toward its five-year median.

Parks are beating management's own forecast. It now expects the high end of its high-single-digit profit growth forecast for Experiences this year.
Streaming is now solidly profitable. Operating profit more than doubled last quarter, to $712M.
Buybacks are shrinking the share count. Disney is buying back about 5% of its market value in a year.
Disney keeps beating estimates. It topped analysts' adjusted earnings forecasts in each of the last four reported quarters.

Bear case: why sellers sell

Sports costs keep rising and parks slow, so earnings grow only in the single digits and heavy park spending leaves less cash for shareholders.

ESPN's profit is falling. Sports operating profit fell 17% last quarter as programming costs rose and UFC rights ended.
Cash flow is shrinking. Free cash flow fell 24% over nine months, while capital spending is running near $9B this year.
Near-term estimates are falling. Analysts cut this quarter's estimate about 5% after Disney flagged Moana's weak box office and soft streaming ads. Goldman later cited soft Asia parks.

Where Delphi landsholdWe think today's price already weighs both sides fairly.See why

What to watch

The numbers that will settle the debate.

Parks and experiences profit growth▲ improving

Up 20% last quarter, about 4 points of it from a one-time tariff refund^1,2

Parks earn most of Disney's profit, so their growth largely decides whether earnings grow double digits.

Streaming operating margin▲ improving

13% last quarter, against a full-year target of double digits²

Shows whether Disney+ and Hulu can replace profit lost as cable TV subscribers leave.

Sports operating profit▼ worsening

Down 17% last quarter; management still expects mid-single-digit growth for the year²

Shows whether ESPN's revenue can keep up with rising sports rights costs.

Next earnings report

Nov 17

In 12 days

Earnings calls page ↗

Expected earnings per share: $1.69
Expected revenue: $25.19B

What to listen for: Whether management confirms double-digit earnings growth for fiscal 2027, and how much of it depends on parks versus streaming and ESPN.^15,16

What would prove this wrong

✕Domestic park attendance falls, showing consumers are cutting back on Disney trips.
✕Fiscal 2027 adjusted earnings growth comes in below 10%, missing management's promise.
✕Streaming margin stalls near 10% as ad prices keep falling.
✕ESPN loses a major rights deal or its profit keeps falling past fiscal 2026.

Our ratingHoldas of Nov 3 close, $114.18 · what ratings mean

Parks and streaming should carry about 10% yearly earnings growth and the stock is cheap against its own history, but expected gains only roughly match the S&P 500.

12-month target: $132.98 (+16.5%)
Plus dividend: +1.3%
S&P 500, same method, with dividends: +18.5%
Expected vs the market: -0.7 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $114.18

Target $132.98

bull case25% likely

$154.82 +36%

Parks keep growing near 10%, streaming margin widens past 13% and ESPN profit stabilizes, putting fiscal 2028 earnings near the top of analysts' range.

$8.45 earnings per share × 18.3 = $154.82

base case50% likely

$136.19 +19%

Parks and streaming deliver about 10% yearly earnings growth despite falling sports profit.

$8.30 earnings per share × 16.4 = $136.19

bear case25% likely

$104.70 -8%

Sports costs keep rising, streaming ads stay weak and park attendance slows, so earnings growth falls to single digits and fiscal 2028 lands below consensus.

$8.08 earnings per share × 13 = $104.70

Why these odds: Fiscal 2027 estimates held at $7.49 over 90 days, even as the current-quarter estimate was cut to $1.69. Disney beat the last four quarters and guides to double-digit growth.

How the prices are built: Wall Street expects earnings per share of $8.30 for the year starting a year from now (analysts range from $7.86 to $8.60). Today the stock trades at 15.2 times next year's earnings per share; its five-year middle is 19.9.^{2,15,17,19,20}

What tests the call: Fiscal Q4 2026 earnings and first detailed fiscal 2027 outlook (Nov 12)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 5; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $114.18, investors pay less for each dollar of Disney's earnings than for the average stock's

Disney trades at 15 times the earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's earnings. That is cheaper than it has been 80% of the time over the past five years, when the middle was 20.

Analysts expect earnings to grow about 11% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. At the market's multiple, today's price would only make sense if Disney earned about 18% less than forecast over the next year.

Disney multiple: 15×
S&P 500 multiple: 19×
Base case: +19%
Bear case: −8%

The skewOur bear case loses about 43¢ for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

No reported quarters available.