Long DIS

Disney (DIS) has been struggling for years but I think this morning’s post-earnings selloff represents a nice entry. The stock has been consolidating for a long time and I thought the quarter was pretty good.

Let’s talk about the quarter (1QFY26). Revenue was +5% though Segment Operating Income was -9%. The highlight was their “Parks & Experiences” segment which consists of the theme parks and consumer products. Attendance in the quarter was +1% and per capita spending +4%.

ESPN – which is in their “Sports” segment – is struggling due to higher costs but it’s still a terrific asset. If you want to watch sports or advertise to those who do, you do it on ESPN. Nothing else compares.

Adjusted EPS is forecast to be up double digits compared to $5.93 in FY25. If we assume 12% growth, that’s $6.64. At the current stock price of $106.25, that’s 16x current year earnings. Solid value. Adjusted EPS is also forecast to be up another double digits in FY27.

DIS is also increasing their FY26 buyback to $7 billion from $3.5 billion in FY25. I like that a lot as shares represent good value at current levels IMO.

DIS is going to pay two 75 cent dividends this year which works out to a 1.41% yield.

I initiated a small starter position in DIS this morning.