Disney's Q1 Fiscal 2026 Earnings Report Analysis
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- 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.
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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.
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
Disney's Streaming Business Reaches Profit Turning Point
- Profitability Surge: Disney's direct-to-consumer streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a significant rebound from a cumulative loss of $4.6 billion in 2020 and 2021, demonstrating the sustainability and market appeal of its business model.
- User Growth Strategy: Leveraging powerful intellectual properties like Pixar, Star Wars, and Marvel, Disney rapidly expanded its subscriber base, with projected operating profits of $500 million in Q2 2026, reflecting a $200 million increase from the previous year and showcasing its competitive edge in the streaming market.
- Attractive Market Valuation: Disney's stock is currently trading at a forward price-to-earnings ratio of 16.2, below the S&P 500's 22.2 multiple, indicating that the market has yet to fully digest its transition, potentially offering an attractive buying opportunity for investors.
- Future Growth Expectations: The company's leadership anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues into fiscal 2027 and beyond, the profitability of its streaming business could drive a bull run in its stock price.
See More
Disney's Streaming Profits Surge Amid 48% Stock Decline: Is a Bull Run Ahead?
- Streaming Business Transformation: Disney's direct-to-consumer streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a successful turnaround from a cumulative loss of $4.6 billion in 2020 and 2021, indicating strong recovery potential in the streaming market.
- User Growth Strategy: By integrating platforms like Disney+, Hulu, and ESPN, Disney rapidly expanded its subscriber base, leveraging its powerful intellectual property to attract global audiences, thereby enhancing market competitiveness and reducing churn rates.
- Attractive Market Valuation: Disney's forward price-to-earnings ratio stands at 16.2, below the S&P 500's 22.2 multiple, suggesting that the current stock price may be undervalued, providing potential buying opportunities for investors.
- Future Growth Expectations: The company anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues, combined with rising streaming profits, Disney's stock could be poised for a bull run.
See More
Disney's Streaming Business Turns Profitable
- Profit Transformation: Disney's direct-to-consumer (DTC) streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a significant turnaround since the launch of Disney+ in 2019, indicating its growing success in a competitive market.
- User Growth: Despite a cumulative loss of $4.6 billion in fiscal 2020 and 2021, Disney rapidly scaled its subscriber base, leveraging its strong intellectual property, which underscores the global appeal of its content and sets a foundation for future growth.
- Market Valuation: Disney's current forward price-to-earnings ratio stands at 16.2, significantly lower than the S&P 500's 22.2 multiple, suggesting that the market undervalues its stock, potentially offering an attractive buying opportunity for investors.
- Future Outlook: The company anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues alongside rising streaming profits, Disney's stock could enter a bull run, further solidifying its market position.
See More
Walt Disney's Five-Year Outlook
- Streaming Growth Potential: Disney's streaming platforms Disney+ and Hulu+ had 191 million global subscribers as of September 2025, with an expected operating income of $500 million in Q2 2026, marking a significant rebound from a $2.9 billion operating loss in fiscal 2020, indicating strong positioning in the new media landscape.
- Experiential Business Expansion: Disney's experiences segment reported $10 billion in revenue and $3.3 billion in operating income in Q1 2025, with plans to expand its fleet by introducing new cruise ships for the Asia market and ongoing park expansions, enhancing customer attraction.
- Long-Term Investment Plan: Management announced a $60 billion investment in September 2023 to bolster the experiences segment, demonstrating the company's commitment to enhancing customer experiences and attracting more potential visitors, particularly those with Disney affinity who have not yet visited the parks.
- Shareholder Return Strategy: Disney shares trade at a forward P/E ratio of 15.8, and in addition to a $0.75 semi-annual dividend, the company plans to buy back $7 billion worth of stock in fiscal 2026, showcasing financial strength and commitment to shareholders, with expectations to outperform the market over the next five years.
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
Disney's Streaming Business Reaches Profit Turning Point
- Profitability Surge: Disney's direct-to-consumer streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a significant rebound from a cumulative loss of $4.6 billion in 2020 and 2021, demonstrating the sustainability and market appeal of its business model.
- User Growth Strategy: Leveraging powerful intellectual properties like Pixar, Star Wars, and Marvel, Disney rapidly expanded its subscriber base, with projected operating profits of $500 million in Q2 2026, reflecting a $200 million increase from the previous year and showcasing its competitive edge in the streaming market.
- Attractive Market Valuation: Disney's stock is currently trading at a forward price-to-earnings ratio of 16.2, below the S&P 500's 22.2 multiple, indicating that the market has yet to fully digest its transition, potentially offering an attractive buying opportunity for investors.
- Future Growth Expectations: The company's leadership anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues into fiscal 2027 and beyond, the profitability of its streaming business could drive a bull run in its stock price.
See More
Disney's Streaming Profits Surge Amid 48% Stock Decline: Is a Bull Run Ahead?
- Streaming Business Transformation: Disney's direct-to-consumer streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a successful turnaround from a cumulative loss of $4.6 billion in 2020 and 2021, indicating strong recovery potential in the streaming market.
- User Growth Strategy: By integrating platforms like Disney+, Hulu, and ESPN, Disney rapidly expanded its subscriber base, leveraging its powerful intellectual property to attract global audiences, thereby enhancing market competitiveness and reducing churn rates.
- Attractive Market Valuation: Disney's forward price-to-earnings ratio stands at 16.2, below the S&P 500's 22.2 multiple, suggesting that the current stock price may be undervalued, providing potential buying opportunities for investors.
- Future Growth Expectations: The company anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues, combined with rising streaming profits, Disney's stock could be poised for a bull run.
See More
Disney's Streaming Business Turns Profitable
- Profit Transformation: Disney's direct-to-consumer (DTC) streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a significant turnaround since the launch of Disney+ in 2019, indicating its growing success in a competitive market.
- User Growth: Despite a cumulative loss of $4.6 billion in fiscal 2020 and 2021, Disney rapidly scaled its subscriber base, leveraging its strong intellectual property, which underscores the global appeal of its content and sets a foundation for future growth.
- Market Valuation: Disney's current forward price-to-earnings ratio stands at 16.2, significantly lower than the S&P 500's 22.2 multiple, suggesting that the market undervalues its stock, potentially offering an attractive buying opportunity for investors.
- Future Outlook: The company anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues alongside rising streaming profits, Disney's stock could enter a bull run, further solidifying its market position.
See More
Walt Disney's Five-Year Outlook
- Streaming Growth Potential: Disney's streaming platforms Disney+ and Hulu+ had 191 million global subscribers as of September 2025, with an expected operating income of $500 million in Q2 2026, marking a significant rebound from a $2.9 billion operating loss in fiscal 2020, indicating strong positioning in the new media landscape.
- Experiential Business Expansion: Disney's experiences segment reported $10 billion in revenue and $3.3 billion in operating income in Q1 2025, with plans to expand its fleet by introducing new cruise ships for the Asia market and ongoing park expansions, enhancing customer attraction.
- Long-Term Investment Plan: Management announced a $60 billion investment in September 2023 to bolster the experiences segment, demonstrating the company's commitment to enhancing customer experiences and attracting more potential visitors, particularly those with Disney affinity who have not yet visited the parks.
- Shareholder Return Strategy: Disney shares trade at a forward P/E ratio of 15.8, and in addition to a $0.75 semi-annual dividend, the company plans to buy back $7 billion worth of stock in fiscal 2026, showcasing financial strength and commitment to shareholders, with expectations to outperform the market over the next five years.
See More
