Walt Disney Today
- 52-Week Range
- $80.10
▼
$124.69
- Dividend Yield
- 0.93%
- P/E Ratio
- 16.86
- Price Target
- $132.90
It’s taken time, but Bob Iger’s magic is working on The Walt Disney Company NYSE: DIS, setting its investors up for robust share price gains in 2026. While the Q4 results were mixed, providing excuses for selling in pre-market action, the takeaways are bullish. Headwinds for this entertainment stock include several one-off factors, such as a decline in political ads and the slate of 2025 movie releases.
Political ads are out of the company’s control, but movie releases aren’t; the company is expected to release at least 14 major movie titles in 2026, including a big-screen version of The Mandalorian, Toy Story, and Avengers: Doomsday. Evidence of Mr. Iger’s magic lies in the company’s operational quality, margin, and earnings, which are outperforming expectations and expected to grow at a double-digit pace next year.
Disney: Earnings Quality and Capital Returns Will Drive Action in 2026
Disney had a decent Q4 and fiscal year 2025 despite the macroeconomic headwinds plaguing global economic activity. The Company’s revenue contracted slightly, falling short of the consensus, but remained relatively flat compared to the prior year, with strengths in Experiences offsetting weaknesses in Entertainment. Within Entertainment, weakness in the movie slate is offset by strength in DTC and streaming.
The company produced a modest single-digit increase in subscription volume, led by Hulu and International markets. Experiences, the slightly smaller segment, grew by 6%, producing a record-setting quarter.
The margin news is central to the 2026 stock price outlook. The company experienced margin pressures, as expected, but successfully mitigated them, resulting in better-than-expected systemwide results. The bottom line is that adjusted earnings of $1.11 fell only 3% year over year, outpacing the consensus estimate by nearly 1,000 basis points. The better news is that margin improvement is expected to stick in 2026 and be compounded by revenue growth for a double-digit earnings gain.
Disney’s Capital Return Is Fairy Dust for Share Prices
Fairy dust helps Peter Pan fly, and so, too, will share buybacks aid an updraft in Disney share prices. The buyback activity in 2025 reduced the count by an average of nearly 1% for Q4 and 1.5% for the year. The forecast for next year is for buybacks to double.
This is in addition to bullish institutional trends, which reveal this market is in an accumulation phase. The likely outcome is that the post-release price pullback will trigger a buying signal, confirming support at or near the 150-week EMA.
Analysts also recommend that investors consider accumulating this stock. The trends as of mid-November include increasing coverage, solid analyst coverage at 28, a steady Moderate Buy rating, and an uptrend in price targets that is not expected to end.
The critical detail is that consensus has been rising steadily over the last 12 months and forecasts a 15% upside from the support target. Assuming the analysts’ trends continue as they are, this stock will likely move into the high end of the target range by the end of next year, adding another double-digit increase to the forecasted gains.
Disney: A Critical Inflection Point
Disney’s market has been gearing up to complete a reversal for several quarters and is at a critical juncture in mid-November. The post-release pullback presents a buying opportunity; the question is whether the market will bite. If not, this stock could retreat into its trading range until a more potent catalyst emerges.
If so, it will confirm support at the critical level and a shift in market sentiment that could drive much higher share prices. The key resistance target is near $125 and could be tested or exceeded by the end of 2025 in this scenario.
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