ii view: Disney roller coaster reaches multi-month peak
Navigating the threat of AI film production, but beating quarterly sales forecasts under a new CEO. Buy, sell, or hold?
6th May 2026 15:56
by Keith Bowman from interactive investor
‘The Dapper Dans’ perform on Main Street in Disneyland, California. Photo: Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images.
Second-quarter results to 28 March
- Revenue up 7% to $25.17 billion
- Adjusted earnings down 8% to $1.57 per share
Guidance:
- Expects growth in adjusted earnings for the full year of around 12%
- Targeting share buybacks of at least $8 billion in 2026, up from a previous $7 billion
New CEO Josh D’Amaro said:
“At an important moment of change for Disney, we remain focused on executing our long-term growth strategy. Our creative and operational momentum drove strong quarterly results, and we continue to expect growth to accelerate in the second half of the fiscal year.
“We are strengthening streaming through continued investment in the creative storytelling that defines us and in product and technology innovation, while advancing ESPN’s direct-to-consumer future, and delivering on our bold growth plans at Disney Experiences.”
- Invest with ii: Buy US Stocks from UK | Most-traded US Stocks | Cashback Offers
ii round-up:
The Walt Disney Co (NYSE:DIS) today detailed sales that exceeded Wall Street hopes as the entertainment giant reaffirmed plans to invest in creative storytelling and technological innovation under new head Josh D’Amaro.
Second-quarter revenue climbed 7% from a year ago to $25.17 billion, led by a 10% rise in Entertainment sales that includes the group’s streaming business. Analysts had expected quarterly sales of $24.8 billion. Adjusted earnings rose 8% to $1.57 per share.
Shares in the Dow Jones company, which have been volatile for the past decade, have just risen 7% to their highest in almost three months, having come into these latest numbers down by just over a tenth so far in 2026. Rival Netflix Inc (NASDAQ:NFLX) has fallen by a similar amount while the Dow Jones index is up by close to 3% year-to-date.
Disney operates across the three divisions of Entertainment, Sports, and Experiences. New CEO Josh D’Amaro forecasts 12% growth in adjusted earnings for the full year.
Planned share buybacks of up to $8 billion in 2026 surpass former management’s estimate of up to $7 billion.
Focus under the new head includes investing in intellectual property, reaching more consumers, and using advanced technologies to power storytelling and expand monetization and returns.
Former CEO Bob Igor headed Disney on and off for close to 20 years. In early April the company under the new boss detailed plans to lay-off around 1,000 staff, largely from its marketing department.
Quarterly entertainment revenue of $11.7 billion was up from $10.7 billion a year ago. Experience sales, taking in its theme parks business, climbed 7% to $9.49 billion. Sports revenues gained 2% to $4.6 billion.
Third-quarter results are likely to be announced early to mid-August.
ii view:
Started in 1923 by brothers Walt and Roy, Disney today employs around 190,000 people. Group brands include Pixar, Marvell Studios, Lucasfilm, ABC News, Hulu and Entertainment and Sports Programming Network or ESPN. Geographically, the Americas generated most revenues during its last financial year at 81%, followed by Europe at 12% and Asia the balance of 7%.
For investors, AI and its potential impact on filmmaking is currently difficult to predict. President Trump's trade policy potentially deterring overseas visitors to the US and the group’s theme parks is not to be ignored. Exposure to economically sensitive advertising sales persists, while costs for sports broadcasting rights remain elevated and with players such as Amazon.com Inc (NASDAQ:AMZN) Prime and Netflix now involved.
- Where to invest in Q2 2026? Four experts have their say
- Stockwatch: are stock market highs really justified?
- Sign up to our free newsletter for investment ideas, latest news and award-winning analysis
To the upside, the new head boss is attempting to rejuvenate group strategy including increased investment in technology like AI. Disney’s diversity of operations regularly sees positives for one division counter challenges in another. A forecast dividend yield of around 1.5% compares to no dividend currently at fellow streamers Netflix and Amazon, while an early focus on costs has been made by the new CEO given previously announced job losses.
On balance, and despite continuing risks, this highly diversified entertainments giant looks to remain worthy of its place in many investor portfolios.
Positives:
- Geographical diversity, strong brands, and media content bank
- Rejuvenated strategy under new CEO
Negatives:
- Cost pressured consumers may cut entertainment spending
- Intense competition
The average rating of stock market analysts:
Buy
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.