The Walt Disney Company (NYSE:DIS) ranks first on our list of the top 10 stocks in Trump’s latest stock portfolio. Trump’s portfolio added Disney in three August buys. He sold Disney in July, and billionaire funds were selling it too. Click to read why. Is the stock worth buying now?
Bull Case: Why Disney Can Rebound
Bulls say Disney is getting stronger in its biggest businesses while the stock trades below its historical valuation. They also think the market is too negative. Antipodes Global Strategy says investors treat the decline of linear TV as a problem for the whole company and overlook two segments that are doing well. Check the full letter here.
Cruises give Disney a clear growth path because each new ship adds capacity it can sell. Two new ships, the Disney Destiny and the Disney Adventure, raised cruise stateroom capacity by about 50% in the latest quarter, and management says both ships keep selling out. Fiscal 2027 will be the first full year with both ships sailing, and Disney plans five more by 2030.
Streaming is also improving. Disney bundles Disney+, Hulu and ESPN, and subscribers who take the bundle cancel less often. Churn fell in the latest quarter. New CEO Josh D’Amaro is cutting costs, with about 1,700 jobs already gone, and Disney is buying back far more stock than a year ago.
Bear Case
Bears worry about competition in streaming. The merger of Warner Bros. Discovery and Paramount Skydance created a rival with Harry Potter and a large film library. Netflix is also pushing into live sports, and billionaire funds were already leaving that stock. Click to read why. Price cuts by streaming rivals could weaken Disney’s bundles.
The parks depend on consumers. Sound Shore said in its first-quarter letter that Disney gave back gains on fears that a long war would hurt consumer and travel stocks. Read the full letter here. International visits to US parks were also softer earlier this year, though management says that pressure has eased. Disney needs new catalysts to move higher.
Valuation
Disney trades at a forward P/E of 15.97, below the market’s 19.1 and below its own five-year average of 22.66, so it looks fairly valued to modestly cheap. Analyst consensus has earnings per share growing 16.78% in fiscal 2026 and 8.15% in fiscal 2027, close to the market’s long-run growth of about 10%. The fiscal 2026 figure includes an extra week worth about 4 points, and management guides to double-digit growth in fiscal 2027 without it. Revenue is forecast to grow only 4.43% in fiscal 2027, so cost cuts and buybacks drive much of the earnings growth. Buyers at this price are betting that Disney grows earnings 8% to 10% a year after the extra week and one-time items fade. The bear case is that earnings growth slows toward revenue growth, and at that pace a multiple near 16 looks fully priced.
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