Disney (DIS) fell in early trading on Thursday after the media and entertainment giant displayed ongoing weakness in its traditional TV and film businesses in FQ4, which outweighed growth in the streaming and parks parts of the overall business. Notably, operating income in the entertainment segment was down 35% year-over-year during the quarter, due mainly to pressure from the content sales/licensing and linear network part of the business.
Wells Fargo analyst Steven Cahall: “DIS’s results indicate a strong FY’26 w/ final EPS growth above the initial guide & solid DTC net adds. The initial in-line forecast for FY’26/’27 likely has upside. However, F1Q is weaker, so there may be some angst about the FH2 weight to the year.”
J.P. Morgan analyst David Karnovsky: “Looking ahead, DIS guided to double-digit EPS growth in F26 and F27, which we believe is broadly in line with investor expectations. The outlook at the segment level is generally consistent with prior guidance, though now includes commentary for growth to be back-half or FQ4 weighted. Disney also announced a doubling of the buyback to $7b and a 50% increase to the dividend.”
Bank of America analyst Jessica Reif Ehrlich: “DIS results appear to be 2H weighted, as 1Q will be adversely impacted by $150 million in preopening and dry dock expenses in Experiences, a $400 million adverse impact from a challenging theatrical comparison (operating income), $140 million lower political revenue, and a $73 million unfavorable Star India comparison vs. 1QFY25. DIS also announced a 50% increase in its dividend and is targeting a doubling of its share repurchases to $7bn in FY26.”
Seeking Alpha analyst Max Greve: “The results were mixed, with Experiences largely continuing to offset linear TV declines. FCF declined only on a quarterly basis, the yearly number was solidly up. The results do emphasize the vital importance of Disney ending its blackout feud with YouTube TV, as ESPN showed declines even before the blackout began. Disney may not have the leverage people think in that area, which poses a risk to accelerate linear declines drastically if most favored nation clauses amplify the financial damage of concessions.”