Walt Disney Co. (DIS) Stock Rebounds After Earnings—Is Disney Still Undervalued?

TLDR

• DIS stock rebounded after Disney’s adjusted earnings beat analyst forecasts, despite a slight revenue miss.
• Disney’s revenue increased 7%, while segment operating income rose 21% and free cash flow climbed 63%.
• Domestic park attendance grew 3%, and guest spending increased 4% during the quarter.
• Disney’s streaming operating income more than doubled to $712 million as SVOD revenue reached $5.53 billion.
• Sports operating income fell 17% due to NBA playoff sweeps and an ongoing carriage dispute.
• Disney plans at least $9 billion in share buybacks during fiscal 2026.

Walt Disney Co. (DIS) stock moved higher after Walt Disney reported adjusted earnings above analyst estimates, even as revenue missed forecasts by a narrow margin. Investors focused on stronger profits from domestic parks, cruises, and streaming.

The Walt Disney Company, DIS

Disney said segment operating income rose by $980 million. Domestic Parks and Experiences, together with subscription video, produced $821 million of that increase. Revenue grew 7%, segment operating income rose 21%, and free cash flow climbed 63%.

DIS Stock Gains on Parks and Cruise Growth

Domestic park attendance increased 3%, while spending per guest rose 4%. Two new cruise ships lifted stateroom capacity by about 50%, supporting growth across Disney’s domestic Experiences business.

A $100 million tariff refund also helped the segment. Disney said the refund added about four percentage points to operating income growth. International visitors to US parks remained weak, though management reported some improvement.

Disney’s subscription video revenue rose 11% to $5.53 billion. Operating income reached $712 million, more than double the prior-year level. The margin increased to 12.9% from about 6.6%.

Subscriber growth added nine percentage points to subscription fee gains, while higher prices added three points. Advertising revenue rose 3% as more impressions offset weaker pricing. Domestic streaming ad revenue, however, remained under pressure.

Sports Weakness Limits Earnings Growth

Sports revenue increased 4%, but operating income fell 17% to $858 million. Disney blamed four NBA playoff sweeps and a continuing carriage dispute for part of the decline.

Universal reported a different parks trend. Revenue rose 2.7% as Epic Universe supported sales, but adjusted park EBITDA fell 5.1% because costs increased. Disney reports operating income, so the comparison is not exact.

CEO Josh D’Amaro and CFO Hugh Johnston said they believe Disney shares remain undervalued. The company plans at least $9 billion in fiscal 2026 buybacks. Disney expects the proposed $1.2 billion A+E divestment to support those purchases.

DIS stock had fallen 13.7% in 2026 before the earnings report. The rebound recovered only part of that loss. Risks remain, including weak Asian parks, lower domestic streaming ad revenue, and uneven film results.

Toy Story 5 passed $1 billion worldwide and supported merchandise, streaming activity, and park demand. Disney also expects an extra 53rd week to add about $600 million to fourth-quarter segment profit. Management will provide details on costs, guidance, and capital returns during the call.

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