Disney Plans Largest Buyback in Nine Years
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16h ago
0mins
Source: NASDAQ.COM
- Buyback Program Scale: Disney is guiding for a $7 billion stock buyback in fiscal 2026, which is double the amount from fiscal 2025 and the second-largest annual buyback plan ever, indicating management's confidence in the stock being undervalued.
- Strong Cash Flow: For fiscal 2026, Disney projects $19 billion in cash from operations, leaving $10 billion in free cash flow after $9 billion in capital expenditures to fund buybacks and approximately $2.6 billion in dividend expenses, ensuring the sustainability of the buyback program.
- Impact on Share Count: The $7 billion buyback could reduce Disney's outstanding shares by about 67.5 million, or 3.8% of total shares, significantly enhancing earnings per share and shareholder value, akin to Apple's successful buyback strategy over the past decade.
- Long-Term Growth Strategy: Despite the substantial buyback, Disney continues to invest heavily in expanding its cruise fleet, renovating parks, and producing content, demonstrating a commitment to long-term growth potential while returning value to shareholders.
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Analyst Views on DIS
Wall Street analysts forecast DIS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DIS is 137.29 USD with a low forecast of 123.00 USD and a high forecast of 152.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
16 Buy
3 Hold
0 Sell
Strong Buy
Current: 104.970
Low
123.00
Averages
137.29
High
152.00
Current: 104.970
Low
123.00
Averages
137.29
High
152.00
About DIS
The Walt Disney Company is a diversified worldwide entertainment company. The Company's segments include Entertainment, Sports and Experiences. The Entertainment segment generally encompasses its non-sports focused global film and episodic content production and distribution activities. The lines of business within the Entertainment segment along with their business activities include Linear Networks, Direct-to-Consumer, and Content Sales/Licensing. The Sports segment encompasses its sports-focused global television and direct-to-consumer (DTC) video streaming content production and distribution activities. The lines of business within the Sports segment include ESPN and Star. The Experiences segment includes Parks and Experiences and Consumer Products. Parks and Experiences consists of Walt Disney World Resort in Florida, Disneyland Resort in California, Disney Cruise Line, and others. Consumer Products includes licensing of its trade names, characters, visual, literary and other IP.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Streaming Profitability Improvement: Disney's streaming segment saw operating income surge from $189 million to $450 million in the latest quarter, achieving an operating margin of 8.4%, reflecting significant progress in cost control and profitability enhancement.
- Stock Buyback Initiative: Disney announced a plan to repurchase $7 billion in stock in fiscal 2026, which could reduce the share count by 3.8%, signaling management's confidence in the stock's value while also enhancing earnings per share, thereby boosting investor sentiment.
See More
Disney's Earnings Report Highlights High Growth Potential
- Experiences Segment Growth: Disney's experiences segment reported $10 billion in revenue and $3.31 billion in operating income for Q1 FY2026, demonstrating strong growth despite a multi-year slowdown, making it the primary driver of the company's earnings rebound.
- Streaming Profitability Improvement: The streaming segment's operating income more than doubled from $189 million last year to $450 million, achieving an operating margin of 8.4%, indicating significant progress in cost control and profitability enhancement.
- Stock Buyback Plan: Disney plans to repurchase $7 billion in stock in FY2026, supported by an anticipated $19 billion in operating cash flow, which will reduce the share count by 3.8% and accelerate earnings per share growth, reflecting management's confidence in the company's value.
- Box Office Recovery: Global box office revenue reached $6.45 billion in 2025, marking the third-highest year in company history, driven by major hits like Avatar: Fire and Ash, with plans for highly anticipated releases in 2026 to sustain this momentum.
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- Stock Buyback Plan: Disney is guiding for a $7 billion stock buyback in fiscal 2026, doubling its 2025 plan, indicating management's confidence in the stock's undervaluation, supported by $19 billion in operating cash flow and $10 billion in free cash flow for this initiative.
- Cash Flow Status: With capital expenditures projected at $9 billion, the remaining free cash flow will cover both the buyback and approximately $2.6 billion in dividend expenses, demonstrating Disney's ability to maintain healthy cash flow while returning value to shareholders.
- Market Performance: Although Disney's streaming service is growing slowly and its linear networks face challenges, the experiences segment, particularly parks and the rapidly growing cruise business, remains a strong cash cow supporting overall financial performance.
- Long-Term Growth Potential: With the streaming business now profitable and margins improving, alongside guidance for double-digit adjusted earnings per share growth, Disney stands out as a compelling value stock to buy in February.
See More
Disney Plans Largest Buyback in Nine Years
- Buyback Program Scale: Disney is guiding for a $7 billion stock buyback in fiscal 2026, which is double the amount from fiscal 2025 and the second-largest annual buyback plan ever, indicating management's confidence in the stock being undervalued.
- Strong Cash Flow: For fiscal 2026, Disney projects $19 billion in cash from operations, leaving $10 billion in free cash flow after $9 billion in capital expenditures to fund buybacks and approximately $2.6 billion in dividend expenses, ensuring the sustainability of the buyback program.
- Impact on Share Count: The $7 billion buyback could reduce Disney's outstanding shares by about 67.5 million, or 3.8% of total shares, significantly enhancing earnings per share and shareholder value, akin to Apple's successful buyback strategy over the past decade.
- Long-Term Growth Strategy: Despite the substantial buyback, Disney continues to invest heavily in expanding its cruise fleet, renovating parks, and producing content, demonstrating a commitment to long-term growth potential while returning value to shareholders.
See More
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- FCC Investigation Launched: The Federal Communications Commission (FCC) has opened an investigation into ABC's 'The View' to determine if it breached equal time requirements following an interview with Democratic Texas Senate candidate James Talarico, marking the FCC's first scrutiny of political interviews under newly tightened rules.
- Equal Time Rules Reinterpreted: Under federal law, broadcasters must provide comparable airtime to opposing candidates when one is featured, unless exempt; the FCC's recent statement indicates that daytime and late-night talk shows no longer automatically qualify for this exemption, changing the landscape for political coverage.
- Trump Pressures FCC: Former President Trump has repeatedly urged the FCC to take action against major broadcasters for perceived biased political coverage, suggesting that the FCC should revoke licenses of stations airing Disney-owned ABC programming, adding a layer of political pressure to the investigation.
- Disney Earnings Beat Expectations: Despite the ongoing FCC investigation, Disney reported first-quarter results that exceeded Wall Street expectations, with adjusted earnings of $1.63 per share surpassing the consensus estimate of $1.57, and a 5% year-over-year revenue increase to $25.98 billion, indicating strong financial health amid regulatory scrutiny.
See More
Disney's Earnings Report Triggers Stock Volatility
- Experiences Segment Growth: Disney's experiences segment reported $10 billion in revenue and $3.31 billion in operating income for Q1 FY2026, significantly up from $7.4 billion and $2.34 billion in Q1 FY2019, indicating strong global demand for its entertainment offerings and enhancing its competitive position in the market.
- Streaming Profitability Improvement: The streaming segment's operating income more than doubled from $189 million last year to $450 million, achieving an operating margin of 8.4%, demonstrating Disney's significant progress in cost control and profitability, with further margin growth expected in the future.
- Box Office Revenue Recovery: In 2025, Disney's global box office revenue reached $6.45 billion, marking the third-highest annual revenue in company history, driven by major hits like Avatar: Fire and Ash, with plans to maintain momentum in 2026 through anticipated releases.
- Stock Buyback Plan: Disney aims to repurchase $7 billion in stock in FY2026, supported by an anticipated $19 billion in operating cash flow, which will reduce the share count by 3.8%, enhancing earnings per share and reflecting management's confidence in the stock's value.
See More
Disney's Earnings Report Triggers Stock Decline
- Negative Earnings Reaction: Following Disney's fiscal Q1 2026 earnings report, shares fell 7.4%, nearing an eight-month low, primarily due to weak performance in the sports segment and lowered profitability projections for the first half of fiscal 2026, indicating significant market concern.
- Experiences Segment Growth: Despite overall challenges, Disney's experiences segment reported $10 billion in revenue and a 33.1% operating margin in Q1 2025, showcasing strong market demand and profitability, serving as a key driver for the company's earnings rebound.
- Streaming Profitability Improvement: Disney's streaming segment saw operating income surge from $189 million to $450 million in the latest quarter, achieving an operating margin of 8.4%, reflecting significant progress in cost control and profitability enhancement.
- Stock Buyback Initiative: Disney announced a plan to repurchase $7 billion in stock in fiscal 2026, which could reduce the share count by 3.8%, signaling management's confidence in the stock's value while also enhancing earnings per share, thereby boosting investor sentiment.
See More
Disney's Earnings Report Highlights High Growth Potential
- Experiences Segment Growth: Disney's experiences segment reported $10 billion in revenue and $3.31 billion in operating income for Q1 FY2026, demonstrating strong growth despite a multi-year slowdown, making it the primary driver of the company's earnings rebound.
- Streaming Profitability Improvement: The streaming segment's operating income more than doubled from $189 million last year to $450 million, achieving an operating margin of 8.4%, indicating significant progress in cost control and profitability enhancement.
- Stock Buyback Plan: Disney plans to repurchase $7 billion in stock in FY2026, supported by an anticipated $19 billion in operating cash flow, which will reduce the share count by 3.8% and accelerate earnings per share growth, reflecting management's confidence in the company's value.
- Box Office Recovery: Global box office revenue reached $6.45 billion in 2025, marking the third-highest year in company history, driven by major hits like Avatar: Fire and Ash, with plans for highly anticipated releases in 2026 to sustain this momentum.
See More
Disney's Q1 Fiscal 2026 Earnings Report Analysis
- Stock Buyback Plan: Disney is guiding for a $7 billion stock buyback in fiscal 2026, doubling its 2025 plan, indicating management's confidence in the stock's undervaluation, supported by $19 billion in operating cash flow and $10 billion in free cash flow for this initiative.
- Cash Flow Status: With capital expenditures projected at $9 billion, the remaining free cash flow will cover both the buyback and approximately $2.6 billion in dividend expenses, demonstrating Disney's ability to maintain healthy cash flow while returning value to shareholders.
- Market Performance: Although Disney's streaming service is growing slowly and its linear networks face challenges, the experiences segment, particularly parks and the rapidly growing cruise business, remains a strong cash cow supporting overall financial performance.
- Long-Term Growth Potential: With the streaming business now profitable and margins improving, alongside guidance for double-digit adjusted earnings per share growth, Disney stands out as a compelling value stock to buy in February.
See More
Disney Plans Largest Buyback in Nine Years
- Buyback Program Scale: Disney is guiding for a $7 billion stock buyback in fiscal 2026, which is double the amount from fiscal 2025 and the second-largest annual buyback plan ever, indicating management's confidence in the stock being undervalued.
- Strong Cash Flow: For fiscal 2026, Disney projects $19 billion in cash from operations, leaving $10 billion in free cash flow after $9 billion in capital expenditures to fund buybacks and approximately $2.6 billion in dividend expenses, ensuring the sustainability of the buyback program.
- Impact on Share Count: The $7 billion buyback could reduce Disney's outstanding shares by about 67.5 million, or 3.8% of total shares, significantly enhancing earnings per share and shareholder value, akin to Apple's successful buyback strategy over the past decade.
- Long-Term Growth Strategy: Despite the substantial buyback, Disney continues to invest heavily in expanding its cruise fleet, renovating parks, and producing content, demonstrating a commitment to long-term growth potential while returning value to shareholders.
See More
