Key Takeaways
- Walt Disney (DIS) stock is up 9% in the past month, a stretch when the Nasdaq 100 fell.
- Analysts’ earnings forecasts barely moved, so investors are paying a higher multiple for the same profits.
- Disney reports on Nov. 17, and its fiscal 2027 outlook will show whether earnings can back the higher price.
- At about 15x forward earnings, well below its five-year average of 21x, the stock still looks like a buy if that outlook holds.
Walt Disney stock is up 9% in the past month, while the S&P 500 fell 2% and the Nasdaq 100 fell 9%.
There’s no single reason for the run. The month brought plenty of news but no new earnings, which puts a lot of weight on Disney’s fiscal Q4 report on Nov. 17.
A Super Bowl, a Citi raise and a chatbot
On Oct. 7, Disney confirmed that Disney+ will stream the 2027 Super Bowl, a game that falls in its fiscal 2027.
Bloomberg Intelligence’s Geetha Ranganathan put a price on the ads on a podcast that same day: “Disney is selling a Super Bowl spot, an ad spot at $10 million to $12 million.”
Yorkville Ives initiated coverage at “Buy” with a $125 target the same day. On Oct. 16, Citi raised its target to $140 from $135 and kept its Buy rating.
The other news came on Oct. 12. Character.AI filed for Chapter 11 with Disney as its stalking-horse bidder, offering $20 million for a non-exclusive, perpetual license to some of its intellectual property.
Disney also agreed to hire most of the startup’s staff, at an estimated $60 million a year plus retention awards, according to a court filing. (Disney’s new chief technology officer, Karandeep Anand, is Character.AI’s former CEO.)
That’s pocket change for a company that brought in $94.4 billion of revenue in fiscal 2025, and the deal isn’t final.
On Oct. 23, 31 states and the District of Columbia objected to the proposed sale rules. They asked the court to cut Disney’s $700,000 bid fee and give rival bidders more time.
TIKR tracks 34 analysts on Disney. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Disney, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Disney’s Analyst Ratings
Investors are paying more for the same earnings
From Sept. 30 to Oct. 23, Disney’s forward P/E rose from about 14x to 15x. Over the same stretch, analysts’ estimate for its next twelve months of normalized EPS only edged from $7.54 to $7.56.
The forecast itself is healthy. Analysts expect normalized EPS to climb from $5.93 in fiscal 2025 to $7.50 in fiscal 2027 and $8.40 in fiscal 2028:
And even after the run, Disney trades at about 15x forward earnings, far below its five-year average of 21x:
Disney has to deliver on Nov. 17
Disney reports before the open on Nov. 17. Analysts expect normalized EPS of $1.69 on $25.19 billion of revenue, against $1.11 a year ago, with an extra 53rd week in the quarter.
Not counting that week, management has guided to about double-digit adjusted EPS growth for fiscal 2026 and fiscal 2027 as well.
The business has been heading the right way. Disney’s operating margin has nearly tripled since fiscal 2021:
In its fiscal Q3, the Disney+ and Hulu subscription business earned a 12.9% margin, up from around 6% a year earlier, and operating income at Experiences rose 20% to $3.0 billion.
Disney also raised its fiscal 2026 buyback target to at least $9 billion.
Advertising is the soft spot. Subscription ad revenue rose 3% in Q3 as ad rates fell 4%.
On Sept. 9, CFO Hugh Johnston told Goldman Sachs’ Communacopia + Technology conference that added supply was pressuring streaming ad prices. He said Disney expected “a little bit of softness to continue in Q4.”
I’d buy more at 15x
At that same conference, Johnston called Disney “an earnings compounder type of company,” and Nov. 17 is its chance to prove it.
I’d buy more ahead of the report. If management reaffirms its double-digit outlook for fiscal 2027, earnings will be backing October’s higher multiple.
The average analyst target of $127 is about 12% above Monday’s close.
Of course, if management trims that fiscal 2027 outlook, the run has nothing behind it but a higher multiple.
So what is Disney stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Disney could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
