Key Morningstar Metrics for Walt Disney
What We Thought of Walt Disney’s Earnings
Walt Disney DIS stock fell substantially after the firm reported a 0.5% year-over-year decline in fiscal fourth-quarter revenue. The weakness was entirely in linear entertainment networks and theatrical films. Results in parks and experiences, streaming, and sports were encouraging, as is the 2026 outlook.
Why it matters: Linear entertainment networks are becoming inconsequential, and theatrical sales depend on film release schedules and success, which last year had Inside Out 2 and Deadpool & Wolverine. Quarterly choppiness is expected and not indicative of business health or prospects.
The bottom line: We maintain our $120 per share fair value estimate and believe the selloff makes Disney’s stock attractive. The critical pieces to our valuation are continuing strength in experiences—the most important component underpinning our wide moat rating—and streaming. Results in both areas were good.
Coming up: Disney has two new cruise ships launching in fiscal 2026. Cruise demand remains high, and domestic parks bookings for 2026 are up 3%. We believe the experiences assets will drive durable long-term segment growth, which is most critical to Disney’s financials.
- Fourth-quarter experiences sales grew 6% year over year, while operating income grew twice as fast.
Key stats: Fourth-quarter streaming entertainment sales (excluding ESPN) were up 8% year over year (10% organically). The 8.5 million Hulu net additions were mostly due to the inclusion of Hulu access for Charter pay TV subscribers at the end of the quarter.
- Disney+ organically added 4 million subscribers, including 2.5 million internationally, where management is targeting more content investment. Also encouraging, 80% of ESPN streaming subscribers are taking the bundle with Disney+ and Hulu.
- Disney’s ability to bundle entirely with its own platforms, plus its willingness to bundle with others, contributes to our view that its streaming services will remain winners as the television industry continues to evolve.
Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.
The author or authors do not own shares in any securities mentioned in this article.
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