ii view: Disney warns of fewer overseas visitors to theme parks
Previously raising streaming fees and expanding via new cruise ship options. We assess prospects for this Dow Jones company.
3rd February 2026 11:02
by Keith Bowman from interactive investor
A vendor sells balloons on Main Street in the Magic Kingdom at Walt Disney World, Orlando, Florida. Photo: Gary Hershorn/Getty Images.
First-quarter results to 27 December
- Revenue up 5% to $25.98 billion
- Adjusted earnings down 7% to $1.63 per share
Guidance:
- Continues to expect double digit growth in adjusted earnings in 2026
Chief executive Robert Iger said:
“We are pleased with the start to our fiscal year, and our achievements reflect the tremendous progress we’ve made.”
“As we continue to manage our company for the future, I am incredibly proud of all that we’ve accomplished over the past three years.”
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ii round-up:
Entertainments giant The Walt Disney Co (NYSE:DIS) warned of fewer overseas visitors to its US theme parks during the current quarter, but maintained hopes for a full-year double digit earnings increase with growth weighted more to the second half.
First-quarter revenues to late December rose 5% to $25.98 billion from a year ago, although higher costs for items such as marketing and TV production dragged adjusted earnings down 7% to $1.63 per share. Wall Street had forecast outcomes of $25.7 billion and $1.57 per share respectively. Disney executives are expected to meet imminently to pick a potential successor to chief executive Bob Igor.
Shares in the Dow Jones company fell by more than 7% in post results trading having come into this latest news up by 2% in 2025. The Dow Jones index rose 13% last year. Fellow streamer Netflix Inc (NASDAQ:NFLX) gained 5%.
Disney operates across the three divisions of Entertainment, Sports, as well as Experiences or theme parks. Increased streaming fees and film successes such as Zootopia 2 helped sales for the Entertainment division rise 7% to $11.6 billion, although higher costs dragged profits down by a third to $1.1 billion.
Experiences related revenue climbed 6% to $10 billion, with increased home US visitors to its parks and robust demand for sea cruises more than countering a drop in overseas park customers. Profits rose 6% to $3.3 billion.
Sports related revenue was relatively flat at $4.9 billion, although higher production costs and broadcasting rights left profits down by close to a quarter at $191 million.
Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares post the results, flagging a target price of $135 per share.
ii view:
Began in 1923 by brothers Walt and Roy, Disney today employs over 190,000 people. Group brands include Pixar, Marvell Studios, Lucasfilm, ABC News, Hulu and Entertainment and Sports Programming Network or ESPN. Experiences or theme parks and cruises generated its biggest slug of profits over its last 2025 financial year at 57%. That was followed by Entertainment at 27% and Sports the balance of 16%.
For investors, President Trump's trade policy potentially deterring overseas visitors to the US is not to be ignored. Costs generally including sports broadcasting rights remain elevated. Exposure to economically sensitive advertising sales is not to be forgotten, while Disney’s previous return to its former head Bob Iger now adds extra uncertainty and importance in its search for a successor.
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To the upside, Disney’s diversity of operations regularly sees positives for one division countering challenges for another. Expansion of the Experiences division is being made via new ocean cruise ships. A forecast dividend yield of 1.4% compares to no current dividend payments at fellow streamers Netflix and Amazon.com Inc (NASDAQ:AMZN), while a new CEO would likely look to reinvigorate the company’s existing growth strategy.
In all, and despite ongoing risks, this highly diversified entertainments giant looks to remain worthy of consideration for a place in investor portfolios.
Positives:
- Geographical diversity, strong brands, and media content bank
- Focus on costs
Negatives:
- Cost pressured consumers may cut entertainment spending
- Intense competition
The average rating of stock market analysts:
Buy
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