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Disney is navigating the transition to streaming and uncertainty in the movie theater business.
The company's content is valuable, and its experiences business is unmatched.
Entertainment juggernaut Walt Disney (NYSE: DIS) is navigating a transformational period in the media industry. The company's linear TV business, once a cash cow, is in decline as streaming services become king. Disney's own streaming business is doing well, but the company faces a slew of competition. Disney continues to dominate the box office, with multiple potential blockbusters slated for release in 2026. However, the future of the movie theater business is uncertain.
Image source: Walt Disney.
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While Disney is certainly facing challenges, there are multiple reasons to consider buying the stock if you have $1,000 to spare.
Warner Bros. Discovery, a struggling media giant, is likely to be acquired for at least the $72 billion Netflix has offered. Warner Bros. Discovery's content, intellectual property, and franchises are worth a fortune to a company like Netflix.
Disney has an even stronger slate of franchises and media properties, including Marvel, Star Wars, and its classic characters. That intellectual property feeds the experiences business, which includes Disney's wildly profitable parks and cruise ships. In fiscal 2025, Disney's experiences segment generated $36 billion in revenue and nearly $10 billion in operating profit.
In the near term, the changing face of the media industry could pressure Disney's results as it navigates the rise of streaming and the uncertain future of the movie theater business. However, Disney has adapted before, and it will adapt again. How Disney makes money may change, but what won't change is the value of the company's incredible portfolio of content.
Disney stock trades for around 17 times fiscal 2025 earnings, and the company expects double-digit EPS growth in fiscal 2026 and fiscal 2027. Given the value of Disney's media properties and content, that valuation looks like a bargain.
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Timothy Green has positions in Walt Disney. The Motley Fool has positions in and recommends Netflix, Walt Disney, and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
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