Streaming momentum, but challenges in other parts of the business – that was one of the big-picture takeaways from the latest earnings update from Disney on Nov. 13.
The Hollywood conglomerate, led by CEO Bob Iger, also unveiled that it would increase its spending on content next year by $1 billion to a total of $24 billion amid a competitive marketplace.
And, notably, the Disney chief also hinted at potential artificial intelligence deals that may power user-generated content on Disney+. “We’ve been in some interesting conversations with some of the AI companies and I would characterize some of them as quite productive conversations as well, seeking to not only protect the value of our IP and of our creative engines, but also to seek opportunities for us to use their technology to create more engagement with consumers,” Iger said.
Disney shares dropped 7.8 percent after Thursday’s earnings report and conference call as investors seemed to focus on challenges and trends in the theme parks and linear TV units.
That said, many on Wall Street are recommending Disney’s stock. Here is a look at some of their takeaways and outlook after the entertainment giant’s latest set of results.
Analyst: Laurent Yoon
Firm: Bernstein
Price Target: $129
Stock Rating: “Outperform”
Key Takeaway: “Despite the usual puts and takes, direct-to-consumer (DTC) profitability is on a firm trajectory – growing around 10x year-over-year – and the roughly $2 billion in revenue increase over the same period suggests Disney may have reached the point where operating leverage drives margin expansion.” Overall, Yoon summarized in the headline of his report: “Time to decide – are you renting, buying, or coming back later?
Outlook: “At the current price point, the stock looks increasingly attractive to value investors, yet it’s difficult to lean solely on the earnings-power narrative when such a large, mixed portfolio of businesses – each headline-worthy – fails to strike a positive tone together, leading to a meaningful discount to its valuation.”
Analyst: Michael Morris
Firm: Guggenheim
Price Target: $140
Stock Rating: “Buy”
Key Takeaway: “Domestic Parks and Experiences were modestly below our estimate and led to 7.8 percent full-year segment operating income growth vs. 8 percent guide provided… While the miss was small, we see [it] as relevant given intense investor focus on demand and consumer trends.”
Outlook: “Fiscal year ’26 segment operating income growth will be primarily back-half weighted, largely impacted by timing of cruise expenses, film slate release calendar and marketing, and sports rights payments.” Concluded Morris: “Our $140 price target (unchanged) reflects our confidence in the long-term strength and potential for parks growth and the renewed focus on profitable growth at the company’s media and entertainment assets, offset by uncertainty toward consumer demand and the pace of the linear networks decline.”
Analyst: Robert Fishman
Firm: MoffettNathanson
Price Target: $140
Stock Rating: “Buy”
Key Takeaway: “Disney’s headline print this quarter was solid. … So why the [stock] sell-off? U.S. parks EBIT of $920 million (13% below our estimate) and slightly softer-than-expected DTC EBIT of $352 million (7% below our estimate) were likely two of the biggest contributors.”
Outlook: “While we clearly understand the focus on both of these important businesses for Disney’s stock, overall, this quarter, we see them as more of a distraction to the overall story. While we acknowledge macro uncertainty and its potential drag across segments will remain an ongoing question, we continue to believe Disney’s long-term earnings strength should lead to upside in the stock at these lower levels.” So, what should investors do? “Don’t Get DIStracted,” the analyst concluded in reference to the company’s stock ticker symbol DIS.
Analyst: Jessica Reif Ehrlich
Firm: Bank of America
Price Target: $140
Stock Rating: “Buy”
Key Takeaway: “Disney reported a mixed fiscal fourth quarter, with revenue below but operating income and earnings per share modestly above our expectations. All in, total fiscal fourth-quarter revenue was essentially flat to $22.5 billion (vs. our $22.9 billion estimate) and operating income decreased 5 percent to $3.48 billion.”
Outlook: “Disney outlook appears to be second-half weighted as the first quarter will be adversely impacted by several headwinds.” Or as she concluded in the headline of her report: “Shares down after Act 1, but [the second half] holds promise of a happier ending.” As potential stock drivers, she listed: “profitability inflection/growth in DTC; reacceleration in the parks; and multiyear sports drivers (personalization, betting, multiscreen), cementing ESPN’s role as the premium sports platform.”
Analyst: Peter Supino
Firm: Wolfe Research
Price Target: $139
Stock Rating: “Outperform”
Key Takeaway: “Disney reported marginally lower-than-expected revenue and operating income. Results reflected better-than-consensus sports revenue, but lower-than-expected revenue across all other segments.”
Outlook: “Disney’s FY ’26 guidance is for double-digit earnings per share growth, which does not factor in the tailwind from an extra week of operations in FY ’26.”