Key Stats for Disney Stock
- Price Change for Disney stock: -7.8%
- $DIS Share Price as of Nov. 13: $107.61
- 52-Week High: $124.69
- $DIS Stock Price Target: $134.22
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What Happened?
Disney (DIS) stock tumbled over 7% on Thursday despite the entertainment giant beating earnings expectations for its fiscal fourth quarter.
The company reported adjusted earnings of $1.11 per share, topping the $1.02 consensus, but revenue of $22.46 billion fell short of Wall Street’s $22.78 billion estimate.
The revenue miss stems from weakness in Disney’s entertainment segment, which fell 6% year-over-year to $10.21 billion.
Linear TV networks continue to bleed as cord-cutting accelerates, and the theatrical film slate underperformed during the quarter.
Operating income at the TV networks dropped 21% to $391 million, reflecting both declining viewership and the impact of an ongoing carriage dispute with YouTube TV.
Disney’s channels, including ESPN, have been dark on YouTube TV since October 31 due to the standoff. CEO Bob Iger stated that the company has proposed a deal “equal to or better than what other large distributors have already agreed to,” but negotiations are ongoing.
CFO Hugh Johnston acknowledged Disney was prepared for a “challenging battle” and is “ready to go as long as they want to.”
Adding insult to injury, Disney announced this would be the last quarter it reports streaming subscriber numbers.
The company is following Netflix’s playbook by eliminating subscriber count disclosures, which some investors interpret as a sign that growth is slowing.
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What the Market Is Telling Us About Disney Stock
The selloff in Disney stock reflects investor frustration with the messy transition from linear TV to streaming.
While the streaming business posted another strong quarter with operating income up 39% to $352 million, the linear networks continue to deteriorate faster than streaming can offset the losses.
The YouTube TV blackout exacerbates the issue by potentially accelerating cord-cutting among the very subscribers Disney needs to retain.
Disney doubled its share buyback authorization to $7 billion for fiscal 2026 and increased its dividend 50% to $1.50 per share.
The experiences segment delivered a record operating income of $1.88 billion, up 13%, driven by strong demand for both theme parks and cruises.
On the streaming front:
- Disney+ added 3.8 million subscribers to reach a total of 131.6 million, while Hulu reached 64.1 million customers.
- Management reported that 80% of new retail ESPN app subscribers opted for the trio bundle, which includes Disney+ and Hulu, resulting in a significant reduction in churn.
- The ESPN direct-to-consumer app launch appears to be exceeding expectations in terms of both user adoption and advertiser interest.
Looking ahead, Disney stock could find support if management successfully resolves the YouTube TV dispute and delivers on its fiscal 2026 guidance for double-digit adjusted earnings growth.
The film slate for the coming year looks considerably stronger with Avatar: Fire and Ash, Toy Story 5, Moana live-action, and Avengers: Doomsday all scheduled for release.
But the revenue miss and elimination of subscriber metrics raised questions about whether Disney’s transformation story is losing momentum.
Investors appear to have concluded that the transition from legacy media to streaming remains more complicated and expensive than initially anticipated, which justifies the sharp decline in Disney stock.
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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 stocks mentioned. Thank you for reading, and happy investing!
