[Stock Analysis] Disney (NYSE: DIS): Is It Still a Buy at $101? Streaming Finally Turns Profitable

Hey everyone, Hirokichi here.

On August 5, 2026, The Walt Disney Company (NYSE: DIS) reported its fiscal 2026 third-quarter earnings. Adjusted EPS (earnings per share, a measure of how much profit a company generates per share of stock) beat market expectations, and the stock jumped 3.64% the same day. Disney’s long-standing weak spot, its streaming business, is also becoming meaningfully profitable. In this article I’ll walk through the quarter, where the company is headed, and what it might mean for the stock.

What Kind of Company Is Disney?
Stock Price and Key Valuation Metrics
Earnings Check: Revenue and Profit Trends
Where Disney Is Headed: Growth Strategy
Stock Outlook: Bull Case and Bear Case
Summary

What Kind of Company Is Disney?

Disney is one of the world’s largest entertainment companies, spanning film studios, theme parks and cruise lines, the sports network ESPN, and streaming services like Disney+ and Hulu. The business is organized into three segments.

The first is “Experiences,” which includes Disneyland, Disney World, cruise ships, and merchandise — this is the company’s biggest profit engine. The second is “Entertainment,” covering film studios, the Disney+/Hulu streaming business, and linear TV networks like ABC. The third is “Sports,” centered on ESPN.

Disney is traditionally thought of as a theme-park-and-movies company, but over the past several years it has poured investment into Disney+ and streaming, and that bet is now finally starting to pay off in the form of real profit.

Stock Price and Key Valuation Metrics

Let’s start with the stock price. DIS closed at $101.76 on August 5, 2026, up 3.64% from the prior day’s close of $98.18, as investors reacted positively to the earnings report.

Looking at the past year, the stock hit a 52-week high of $124.61 on July 7, 2025, before falling to a 52-week low of $92.19 on March 27, 2026. Over the past year the stock is down roughly 20%, and it remains well below last summer’s highs.

【IMAGE: Insert the “Disney (DIS) Stock Price: Jul 2025 – Aug 2026” chart here】

As the chart shows, the stock corrected sharply from late 2025 into spring 2026, and has since recovered gradually as the company worked through several earnings reports.

On valuation, Disney’s market cap is roughly $173 billion. Its P/E ratio (price-to-earnings ratio, which shows how many times annual earnings per share the stock price represents — a higher number generally means the stock is priced more expensively relative to its profit) sits at around 15x on a trailing basis and roughly 13x on next year’s forecast. The dividend yield (annual dividend divided by share price) is about 1.5%, based on an annualized dividend of $1.50 per share. The P/B ratio (price-to-book ratio, comparing the share price to the company’s net assets per share) has traded in a range of roughly 1.6x to 1.9x over the past six months or so.

Multiple analyst surveys put the average price target around $130, implying roughly 30% upside from current levels. That said, this is only a market forecast, not a guarantee of future performance. (Source for stock price and valuation data: StockAnalysis.com)

Earnings Check: Revenue and Profit Trends

Now let’s look at the numbers. Disney’s fiscal year ends in late September.

【IMAGE: Insert the “Disney Revenue & Operating Income Trend” chart here】

In fiscal 2021, Disney was still recovering from the pandemic, with revenue of $67.4 billion and operating income of just $3.0 billion. Since then, revenue has grown steadily every year, reaching $94.4 billion in fiscal 2025 (fiscal year ended September 27, 2025), up 3% year over year, while operating income surged to $13.0 billion, up 56%. The jump in operating income from fiscal 2024 to fiscal 2025 was especially large, reflecting improved profitability in the streaming business. Diluted EPS for fiscal 2025 came in at $6.85, sharply higher than $2.72 the prior year.

In the most recent quarter — fiscal Q3 2026, covering April through June and ended June 27 — revenue was $25.25 billion, up 7% year over year, and adjusted EPS was $2.06, beating the consensus estimate of $1.86. Revenue did fall just short of the $25.4 billion analysts expected, though, so this wasn’t a completely clean beat-and-raise quarter. Operating income for the quarter rose 21% to $5.6 billion.

By segment, Experiences (parks and resorts) posted record revenue of $9.97 billion, up 10%. The Disney+/Hulu streaming business generated $5.53 billion in revenue, up 11%, and streaming operating income more than doubled to $712 million from $329 million a year earlier, pushing the operating margin to 12.9%. The Sports segment, led by ESPN, brought in $4.5 billion, up 4%. (Sources for financial figures: The Walt Disney Company’s Q4 and full-year fiscal 2025 earnings release, fiscal Q3 2026 earnings materials, and its fiscal 2025 Form 10-K.)

【IMAGE: Insert the “Segment Revenue: Y/Y Comparison (Q3 FY2026)” chart here】

The fact that streaming — long considered a money-losing business — has become this profitable is, in my view, the most encouraging part of this earnings report.

Where Disney Is Headed: Growth Strategy

Disney’s current strategy centers on three priorities.

First is expanding the Experiences business. The company is moving ahead with plans for its seventh theme park, in Abu Dhabi, and is using AI-powered digital twins (computer simulations that mirror real-world facilities) to help design new attractions.

Second is monetizing streaming. Management has reiterated its goal of maintaining double-digit operating margins for the full fiscal year, continuing to lean on price increases and ad-supported tiers to improve profitability. During the August 2026 earnings call, executives also confirmed they are exploring a move into free, ad-supported streaming (FAST — channels viewers can watch for free in exchange for watching ads).

Third is stepping up shareholder returns. The annual dividend has climbed from $0.75 per share in fiscal 2024 to $1.00 in fiscal 2025 and $1.50 (paid as $0.75 semi-annually) in fiscal 2026. The company also raised its fiscal 2026 share buyback target from $8 billion to $9 billion. Taken together, this suggests Disney is directing its improving profits toward both growth investment and returning cash to shareholders.

Stock Outlook: Bull Case and Bear Case

Let’s weigh the bullish and bearish factors for the stock going forward.

On the bull side: (1) Streaming profitability is now real, with operating margin crossing into double digits. (2) The flagship Experiences business continues to post record revenue, showing resilient demand. (3) Shareholder returns are strengthening, with both a rising dividend and a bigger buyback program.

On the bear side: (1) Linear TV and traditional cable, including ABC, remain in structural decline. These businesses still generate meaningful cash today, but the downward trend itself hasn’t reversed. (2) Rising content production and programming costs have at times squeezed profitability in the Entertainment segment. (3) Competition from Netflix and other streaming rivals remains intense, which could limit Disney’s room to keep raising prices. (4) The Experiences business is sensitive to currency swings, international travel demand, and the broader economy.

Personally, I find it encouraging that streaming profitability has arrived faster than I expected. That said, if revenue keeps coming in just slightly below estimates quarter after quarter, that could continue to weigh on the stock’s upside. I’d encourage you to weigh both the bull and bear cases and make your own judgment without overextending yourself.

Summary

Disney looks to me like a company with a genuinely stable profit engine in its parks business, combined with a streaming unit that has finally turned the corner on profitability after years of investment. The stock is still well below where it traded a year ago, but the underlying business appears to be moving in the right direction. There’s plenty to watch going forward, from the new Abu Dhabi park to further progress on streaming margins. As always, steady and sustainable investing wins the race. See you in the next one!

日本語版はこちら → 【銘柄分析】ディズニー(DIS)の今後は？株価101ドルと配信事業黒字化の実力を解説

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* This article is for informational purposes only and does not recommend buying or selling any specific stock. Please make investment decisions at your own responsibility.

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