Disney Trend Forecast: Disney FY26 First Quarter Net Profit Falls 6% Stock Price Slumps 7.4% Can Stock Price Continue to Rise in 2026?

TradingKey - At the start of 2026, the global entertainment giant Disney (DIS) suffered a dismal start to the year. Its fiscal Q1 2026 earnings report showed revenue grew 5% year-over-year to $25.98 billion, appearing to achieve steady growth, yet net profit fell 6% to $2.4 billion. Profits in the core entertainment and sports segments plummeted by 35% and 23%, respectively.

On the day the earnings report was released, Disney's stock price plummeted 7.4% to close at $112.30, with over $16 billion in market value evaporating in a single day. This marked the largest single-day drop since October 2025, bringing the year-to-date decline to over 8.0%.

Why did the former "global entertainment bellwether" experience a divergence of "rising revenue and falling net profit"? Behind the sustained pressure on core businesses, is this a signal of short-term volatility or long-term decline? In 2026, amidst heightened macroeconomic uncertainty and cutthroat industry competition, can Disney's stock price continue to rise?

Hidden Risks in Disney's Fiscal Q1 2026 Highlights as Growth Hits a Bottleneck

Disney's fiscal Q1 2026, corresponding to the calendar period of October to December 2025, coincided with the global Christmas and New Year holidays—a traditional peak season for entertainment and cultural tourism consumption. The market originally had high expectations for Disney's Q1 earnings report, believing that holiday spending would drive a "strong start" for its theme parks, streaming, and film and television entertainment businesses. However, the final financial data presented a mixed picture: while revenue met targets, net profit slumped, core businesses faced significant pressure, and highlights could hardly mask the underlying risks.

Revenue Growth as the Core Highlight of Disney's Q1 Performance

Despite the decline in net profit, Disney's 5% year-over-year revenue growth in Q1 was no accident. It was primarily driven by the steady performance of its three major business segments, representing one of the few "bright spots" in the report and a crucial foundation for investor confidence.

Theme Parks and Experiences Remain a "Cash Cow" with Steady Growth

As Disney's "anchor" business, the Theme Parks and Experiences segment (under the Disney Experiences division) continued its steady growth in Q1, serving as the core driver for revenue. Data shows the segment's Q1 revenue reached $9.86 billion, up 8.2% year-over-year, while operating profit hit $2.73 billion, an increase of 7.9%. It accounted for a staggering 68.2% of the company's total operating profit, far exceeding other segments like entertainment and sports.

Streaming Losses Narrow as Subscriptions Rise Steadily

The streaming business (Disney+, Hulu, ESPN+), once a "loss-making black hole" for Disney, finally showed a positive trend of narrowing losses and growing subscriptions in Q1 after more than two years of cost-cutting and strategic adjustments, serving as another highlight of the earnings report.

Data indicates that Disney's total global streaming subscribers reached 238 million, up 6.7% year-over-year. Among these, core Disney+ subscribers reached 112 million (up 8.3%), Hulu subscribers totaled 48 million, and ESPN+ subscribers reached 78 million.

Cost Control Shows Initial Results, Operating Efficiency Improves

In the face of declining profits in core businesses, Disney continued to push its cost-cutting initiatives in Q1, significantly improving operating efficiency. This was a key factor in supporting revenue growth and alleviating the pressure of declining net profit.

Data shows that Disney's total operating costs for Q1 were $23.15 billion, up 2.1% year-over-year—a growth rate far below the 5% revenue growth, indicating significant success in cost control.

The "disastrous" performance of the entertainment and sports segments dragged down Disney's net profit.

Compared to the revenue growth and highlights in certain businesses, the hidden risks in Disney's Q1 report were more prominent, especially the plunge in profits from core segments, which directly led to the decline in net profit and served as the primary trigger for the stock price collapse. This

Profits Plunge in Both Entertainment and Sports Segments, Core Competitiveness Under Pressure

As Disney's two core business segments, the performance of Entertainment and Sports in Q1 was nothing short of "disastrous," with profits plummeting by 35% and 23%, respectively, making them the hardest-hit areas for the net profit decline.

Specifically, the Entertainment segment (film, television content, etc.) saw Q1 profit fall to just $820 million, a year-over-year decrease of $440 million, primarily due to rising content costs and weak advertising revenue.

Regarding content costs, although Disney controlled overall content spending, the production costs for several major films released in Q1 (such as the Avatar 3 spin-off and the Marvel: Secret Wars prequel) exceeded expectations. The average production cost per film reached $180 million, up 12% year-over-year, while box office performance fell short. The Avatar 3 spin-off grossed only $520 million globally, far below the market expectation of $800 million, leading to a significant drop in the return on investment for content.

The Sports segment (primarily ESPN) recorded a Q1 profit of $1.05 billion, down $320 million year-over-year, mainly impacted by advertising weakness and rising costs for sports broadcasting rights.

Weak Advertising Market Weighs on Multiple Segments, Unlikely to Improve in the Short Term

In Q1, the global advertising market was generally weak, particularly in the U.S., where corporate ad budgets were significantly slashed due to macroeconomic uncertainty. This directly dragged down Disney's advertising revenue, which in turn affected net profit.

Data shows that Disney's total advertising revenue in Q1 reached $2.87 billion, down 7.2% year-over-year. Within this, television ad revenue dropped 10.5%, while streaming ad revenue grew 18.5%; however, the latter's low base was insufficient to offset the decline in television ads.

Pressure on Streaming Subscriptions Persists

While streaming losses narrowed and subscriptions grew in Q1, the underlying subscription pressure remains significant, with signs of slowing growth already appearing.

Data reveals that quarter-over-quarter growth in Disney's streaming subscribers was just 1.2% in Q1, a sharp slowdown from the 2.5% in the previous quarter. Growth in core Disney+ subscribers was only 0.8% quarter-over-quarter, the lowest since 2025.

Growth in International Business Slows

In addition to pressure on domestic U.S. operations, Disney's international business growth slowed significantly in Q1, becoming another major factor dragging down overall corporate growth.

Disney's international revenue for Q1 reached $9.23 billion, up 3.1% year-over-year. This growth rate was well below the 6.8% seen in the domestic U.S. business and also lagged the company's overall revenue growth of 5%.

Disney Faces Internal and External Challenges Amidst Fierce Competition

The pressure on Disney's core businesses and the sharp drop in its stock price in Q1 were driven not only by internal shortcomings but also by intensifying industry competition.

Today, Disney is no longer the undisputed "sole leader" among global entertainment giants. It faces fierce competition across streaming, film and television, theme parks, and sports. With strong pressure from traditional rivals and cross-industry challenges from emerging players, Disney's competitive pressure continues to mount amidst both internal and external woes.

Global Free-for-All in Streaming as Giant Rivalry Intensifies

Streaming has been a key strategic focus for Disney in recent years and is one of its most competitive sectors. Currently, the global streaming market is a "multi-polar" battlefield. Five major platforms—Disney (Disney+, Hulu, ESPN+), Netflix, Amazon Prime Video, HBO Max, and Apple TV +—together command over 80% of the global streaming market. Competition among them has reached a "fever pitch," focused primarily on content, pricing, and user acquisition.

Netflix, the Global Streaming Leader, Continues to Exert Pressure

Netflix As the leader in the global streaming industry, Netflix remains Disney's most formidable competitor. In Q1, Netflix's global subscribers reached 267 million, far surpassing Disney's 238 million. Of those, paid subscribers totaled 245 million, driving subscription revenue of $8.92 billion (up 7.8% year-over-year). Net profit reached $1.87 billion, an increase of 12.3%. In both scale and profitability, it outperforms Disney's streaming business.

Netflix's core advantage lies in "content diversification + global reach." On one hand, Netflix continues to ramp up content investment, with Q1 spending reaching $17.8 billion (up 8.3%). It released several blockbusters like "Stranger Things 5" and "The Glory 2," spanning genres such as mystery, sci-fi, drama, and animation to meet diverse user needs. On the other hand, Netflix has a more comprehensive global footprint, operating in over 190 countries and regions. International users account for 65% of its base, far exceeding Disney's 38%, and its international revenue grew 9.2% year-over-year, outpacing the 5.7% growth of Disney's international streaming operations.

Amazon leverages its e-commerce ecosystem for differentiated competition

Amazon Prime Video (Amazon Streaming) As another major competitor to Disney, it leverages Amazon's robust e-commerce ecosystem and employs a "differentiated competition" strategy to gradually establish a foothold in the streaming market, becoming a formidable rival that Disney cannot afford to ignore.

Data shows that Amazon Prime Video reached 203 million global subscribers in the first quarter. Although lower than Disney's figures, its reliance on the Amazon Prime membership system (where a Prime subscription includes Prime Video at no extra cost) has resulted in a user retention rate of 92%, significantly outperforming Disney streaming's 86%.

Other competitors make individual efforts, siphoning off users

Beyond Netflix and Amazon Prime Video, platforms like HBO Max and Apple TV+ continue to exert pressure, siphoning off Disney's users by leveraging their respective core advantages.

Among them, HBO Max relies on Warner Bros. film and television IP, focusing on high-end content. It has launched titles like the "Game of Thrones" spin-off and the "DC Super Heroes" series, attracting a large base of high-end users, with Q1 subscribers reaching 98 million, up 8.9% year-over-year. Meanwhile, Apple TV+ leverages Apple's ecosystem advantage, focusing on original content with hit series such as "Ted Lasso" and "Severance." By adopting a "low-price strategy" ($4.99/month), it has attracted many Apple users, reaching 58 million subscribers in Q1, a 15.7% year-over-year increase, far exceeding the industry average growth rate.

IP competition intensifies in the film and entertainment sector as emerging players rise

Film and entertainment constitute Disney's "core business." Leveraging its four major IPs—Disney Princess, Marvel, Star Wars, and Pixar—Disney has long maintained a dominant position in the global film market.

However, in recent years, with the recovery of the film industry and intensifying IP competition, Disney's film business has faced a dual onslaught from traditional studios and emerging players, leading to a continuous decline in market share.

Traditional film companies counterattack aggressively to seize market share

Traditional studios such as Warner Bros., Universal Pictures, and Paramount have increased their investments in film production in recent years, releasing multiple blockbusters to aggressively challenge Disney and compete for market share.

Among them, Warner Bros. relies on "DC Super Heroes" "Harry Potter" and other IPs. In the first quarter, it released films such as "The Batman Part II" and "Harry Potter: Magic Awakened," achieving a global box office of $870 million, a 12.3% year-over-year increase.

Universal Pictures, meanwhile, relies on the " Fast & Furious" and "Jurassic World" IPs. In the first quarter, it released "Fast X: Part 2," with a global box office of $1.02 billion, far exceeding the box office performance of Disney's films during the same period.

Paramount, leveraging IPs such as "Transformers" and "Mission: Impossible," released "Transformers: Rise of the Beasts 2" in the first quarter, with a global box office of $680 million, up 9.5% year-over-year.

Emerging film players enter from other sectors, disrupting the industry landscape

Beyond the impact from traditional studios, the cross-sector entry of emerging film players has also disrupted the global industry landscape, presenting new challenges to Disney's film business.

Most representative are streaming platforms like Netflix and Amazon. In recent years, these platforms have ramped up investment in self-produced content, releasing several original films that are not only available on streaming but also receive theatrical releases, competing directly with Disney's traditional film business.

For example, Netflix's original film "The Gray Man 2," released in the first quarter, earned $530 million at the global box office while also being available on the Netflix platform, attracting 35 million viewers. This generated theatrical revenue while simultaneously boosting user engagement on the platform.

Competition intensifies in the theme park sector as local players rise

Theme parks are Disney's "cash cow" business. With unique IP advantages and immersive experiences, Disney's global theme parks have long dominated the worldwide market.

However, in recent years, as the global theme park industry recovers, more companies are entering the space. Disney faces competition from parks worldwide, particularly from rising local players, further squeezing Disney's market share.

Universal Studios, the world's second-largest theme park operator, competes aggressively

Universal Studios, as the world's second-largest theme park operator, is Disney's strongest competitor in the sector. Currently, Universal operates five theme parks globally—in Orlando, Los Angeles, Osaka, Singapore, and Beijing. In the first quarter, global attendance reached 28 million, a 7.5% year-over-year increase. While lower than Disney's 32 million, its growth rate exceeded Disney's 5.8%.

Universal's core advantage lies in "IP differentiation + immersive experience." Leveraging IPs such as "Harry Potter," "Transformers," and "Jurassic World," Universal has created several hit themed areas, such as "The Wizarding World of Harry Potter" at Universal Orlando and "Transformers Metrobase" at Universal Beijing. These areas attract a large number of young and family users through unique IP experiences, creating differentiated competition against Disney's IPs.

Local theme parks leverage domestic advantages to rise rapidly

Beyond Universal Studios, local theme parks around the world are rising rapidly. By leveraging local cultural advantages and low-price strategies, they are siphoning off significant numbers of Disney users, especially in the Asia-Pacific region, where competitive pressure from local players is most pronounced.

For instance, Fantawild and Chimelong Paradise in China, Tokyo Disney Resort in Japan (which operates independently under a licensing model), Universal Studios Japan in Osaka, and Disneyland Paris in Europe leverage local cultural characteristics to create themed experiences tailored to local tastes. Simultaneously, they employ low-price strategies, with ticket prices at only 50%-70% of Disney's, attracting a large number of price-sensitive users.

Intense competition for sports broadcasting rights as new media impact grows evident

The sports business (primarily ESPN) is a significant revenue source for Disney. With a vast portfolio of sports broadcasting rights, ESPN has long dominated the U.S. sports media market.

However, with the continuous rise in sports broadcasting rights costs and the cross-sector impact from new media platforms in recent years, Disney's sports business faces immense competitive pressure, with profits under sustained strain.

The scramble for sports broadcasting rights is intensifying. Disney faces competition from traditional sports media such as Fox Sports, CBS Sports, and NBC Sports, which have increased their investments to secure rights for core leagues like the NFL, NBA, and MLB, driving up costs across the board.

For example, with the NFL broadcasting contract set to expire in 2025, Disney had to pay significantly higher fees to retain the rights. In the first quarter, NFL rights costs increased by 18.5% year-over-year, further squeezing the profit margins of the sports segment.

Disney's core strengths and potential challenges

Despite facing fierce industry competition, Disney, as a leader in the global entertainment industry, still possesses irreplaceable core advantages that serve as the vital foundation for its long-term development.

However, as the global entertainment industry undergoes rapid transformation, Disney also faces numerous potential challenges. Failure to respond promptly could jeopardize its long-term competitiveness.

IP is Disney's core competitiveness

IP is Disney's core competitiveness and its greatest advantage over competitors. After nearly a century of development, Disney has built the world's most valuable entertainment IP portfolio, spanning animation, film, comics, games, and more. Core IPs such as Disney Princess, Marvel, Star Wars, Pixar, and Frozen not only enjoy immense global recognition but also possess powerful monetization capabilities. These IPs permeate all of Disney's business lines—including theme parks, streaming, film and entertainment, and consumer products—creating an "IP + integrated industry chain" commercial closed-loop.

The total value of Disney's core IPs exceeds $200 billion, of which "Marvel" I P value reaches $78 billion, "Star Wars" IP value is $52 billion, and "Disney Princess" IP value is $48 billion—all ranking among the highest in global entertainment IP valuations. These IPs not only drive growth in film box office and streaming subscriptions but also support the development of theme parks and consumer products.

More importantly, Disney's IP creation capability remains robust, allowing it to continuously launch new hit IPs while refreshing classic ones to maintain their vitality. For instance, the "Frozen 3" spin-off series released in the first quarter garnered over 1 billion global views, driving a 1.2% increase in Disney+ subscribers. Although the "Marvel: Secret Wars" prequel underperformed at the box office, it still attracted a large number of Marvel fans, leading to a 12.3% revenue growth in related consumer merchandise.

Disney's industry chain layout shows significant synergy and strong risk resistance

Disney is one of the few entertainment companies worldwide to achieve a "full industry chain layout," with businesses covering film and entertainment, streaming, theme parks, sports, consumer products, and games. Strong synergies between these business lines not only boost the company's overall revenue and profitability but also enhance its risk resistance, mitigating the impact of pressure on any single business segment.

IP synergy: blockbuster IPs launched by Disney's film and television business can directly drive growth in streaming subscriptions, theme park foot traffic, and consumer product revenue. For example, although Avatar 3's box office fell short of expectations, it still drove growth in related theme park projects and merchandise.

Disney's theme parks, film studios, and streaming platforms form a "multi-channel distribution" framework, enhancing content reach and monetization capabilities.

Disney is the bellwether of the global entertainment industry.

After nearly a century of development, Disney has established a broad business layout and strong brand influence globally, becoming a bellwether for the entertainment industry. Currently, Disney's operations span over 190 countries and regions, with five Disney resorts (excluding franchised locations in Tokyo and Abu Dhabi), multiple film production bases, ESPN—the world's largest sports media outlet—and a global streaming platform. Its brand awareness and reputation rank first in the global entertainment sector.

Disney's global brand value reaches $98 billion, ranking 12th on the global brand value list, far exceeding competitors such as Netflix ($28 billion) and Amazon Prime Video ($22 billion).

Disney's growth bottlenecks are becoming increasingly prominent.

Incremental growth in the global entertainment market is drying up.

In recent years, the growth rate of the global entertainment industry has continued to slow down, and incremental market growth has gradually dried up, posing the greatest industry challenge for Disney.

Global streaming market penetration has reached 68%, and the number of new users continues to decrease. The market is gradually entering an era of "stock competition," making the cost of acquiring new users increasingly high for Disney, which has slowed the growth rate of its streaming business.

Global box office growth is also facing a bottleneck. In 2025, global box office revenue reached $48 billion, up 3.2% year-on-year—a rate much lower than the 5%+ seen before 2019. Particularly in mature markets like the U.S. and Europe, box office growth has nearly stalled, while growth in emerging markets has also fallen short of expectations.

Pressure on content profitability continues to intensify.

Content is the core of the entertainment industry; whether in film entertainment or streaming, continuous investment in content is required to attract and retain users.

However, in recent years, content costs in the global entertainment industry have continued to rise, especially production costs for films and sports broadcasting rights, with increases far outstripping revenue growth. This has led to mounting profitability pressure for Disney.

Regarding film production costs, as special effects technology upgrades and actor salaries rise, the production cost per film is increasing. Data shows that Disney's average production cost per film in the first quarter reached $180 million, up 12% year-on-year, while box office growth was only 5.8%, resulting in a continuous decline in return on investment (ROI) for content.

For example, the "Marvel: Secret Invasion" prequel released in the first quarter had production costs of $250 million but a global box office of only $470 million; after deducting marketing and distribution costs, it was barely profitable. The "Avatar 3" spin-off had production costs of $220 million and a global box office of $520 million, significantly compressing profit margins.

Young users' preferences are shifting, making retention more difficult.

With the rapid development of internet technology and young users (Gen Z and Millennials) becoming the main force of consumption, the demands of global entertainment users are undergoing profound changes, presenting new challenges for Disney.

Younger users' entertainment preferences are more diversified and personalized, no longer confined to traditional film and theme parks. Instead, they favor emerging formats like short videos, live streaming, gaming, and AI-interactive entertainment, demanding more in terms of duration, format, and interactivity.

For instance, Gen Z users spend an average of 2.5 hours per day on short video platforms ( TikTok 、 YouTube) totaling 2.5 hours, far exceeding the 1.2 hours spent on streaming platforms ( Disney+ , Netflix) and the 0.3 hours spent in cinemas. Young users prefer "fragmented entertainment," with interest in long-form film content and long-duration theme park visits continuing to decline, while interest in emerging entertainment such as short films, micro-dramas, AI interactive toys, and immersive games is growing.

The rise of AI is restructuring the industry landscape, increasing pressure for transformation.

In recent years, the rapid development of technologies like Artificial Intelligence (AI), Big Data, and Virtual Reality (VR) has been restructuring the global entertainment industry, placing immense transformation pressure on Disney.

In particular, the rise of AI is profoundly changing the way entertainment content is created, distributed, and consumed, creating a major impact on Disney's traditional businesses.

Disney's macroeconomic challenges cannot be ignored.

Beyond its own business shortcomings and challenges from industry competition and shifts, Disney, as a global entertainment enterprise, also faces numerous challenges from the macroeconomic environment.

In 2026, global macroeconomic uncertainty will intensify. Multiple macro factors, including weak U.S. consumption, personnel changes at the Federal Reserve, and slowing global economic growth, will have a profound impact on Disney's business and act as significant external constraints on its 2026 growth.

A weak U.S. consumer market is weighing on business growth.

The U.S. is Disney's core market, accounting for 62% of total revenue; its performance directly determines Disney's overall business trajectory. However, since 2025, the U.S. consumer market has remained weak, especially for discretionary spending (entertainment, tourism, film), placing immense pressure on Disney's core operations.

Data shows that in November 2025, U.S. retail sales grew 0.6% in nominal terms, but only 0.3% in real terms after adjusting for inflation. Real retail sales have been basically flat since 2021 and are now below the 10-year pre-pandemic trend line.

More notably, the U.S. consumer market is showing a clear "K-shaped divergence," with spending by the highest-income group surging 4% (the fastest in four years), while spending by the lowest-income group grew by less than 1%. High-income households in the top 10% contributed nearly 50% of consumption, meaning growth is entirely dependent on high-income support, making the foundation extremely fragile.

Fed personnel changes and quantitative tightening (QT) may impact capital and consumer markets.

In 2026, the Federal Reserve will undergo major personnel changes. U.S. President Trump has nominated former Fed Governor Kevin Warsh as the next Fed Chair to succeed Jerome Powell, whose term ends in May 2026.

Warsh's appointment could lead to a major adjustment in Fed monetary policy. In particular, his proposed "QT + rate cuts" policy mix will have a profound impact on global capital markets and the U.S. consumer market, subsequently affecting Disney's business and stock price.

Tightening liquidity may deal a blow to Disney's stock price.

The Federal Reserve's quantitative tightening (QT) core impact is "tightening market liquidity," which will directly impact U.S. stocks and, by extension, Disney's stock price.

QT means the Fed will sell assets like Treasuries, withdrawing dollars from the market, leading to reduced liquidity, higher corporate borrowing costs, and valuation pressure on the stock market.

As of 2024, the Fed holds about 15% of Treasuries. If QT continues, it will lead to an oversupply of Treasuries, driving up yields and consequently increasing corporate financing costs, affecting profitability and stock performance.

The impact of rising financing costs on Disney's business.

Fed QT will not only hit Disney's stock price but also have a direct negative impact on its operations. On one hand, QT will lead to a stronger dollar, further weighing on Disney's international business. International revenue accounts for 38% of Disney's total; a stronger dollar will "shrink" international revenue when converted and increase operating costs, squeezing profit margins.

QT will drive up corporate borrowing costs. Disney's total liabilities currently stand at $87.067 billion, with a debt-to-asset ratio of 44.5%. If financing costs rise, the company's financial expenses will increase, further squeezing net profit margins.

Slowing global economic growth may lead to sluggish growth in Disney's international markets.

In addition to pressures in the U.S. market, the trend of slowing global economic growth in 2026 will have a profound impact on Disney's international business.

The International Monetary Fund (IMF) predicts that global economic growth will reach 3.2% in 2026, a significant slowdown from 3.8% in 2025. Core overseas markets for Disney, such as Europe and Asia, will experience varying degrees of deceleration in economic growth.

Can the transition to a new Disney CEO bring new growth momentum?

In addition to business, industry, and macro-level challenges, Disney currently faces a "succession crisis"—the current CEO, Bob Iger, whose contract will officially expire in December 2026. The selection of a new CEO has become a focal point of market attention.

As Disney's "legendary CEO," Iger once led the company to high growth. Since his return in November 2022, he has successfully reversed Disney's decline, narrowed streaming losses, and achieved steady growth in the theme parks business. However, as his tenure nears its end, the succession issue has become increasingly prominent, becoming a critical factor affecting investor confidence and the company's long-term trajectory.

According to media reports, there are currently two frontrunners for the new Disney CEO position: Josh D'Amaro, head of Disney Experiences, and Dana Walden, co-chairman of Disney Entertainment. The two are engaged in an intense "succession battle" that is not only a personal rivalry but also a clash of two different business philosophies.

Whether Disney chooses an operations expert deeply immersed in Disney culture or a creative "queen" adept at navigating Hollywood, the choice will yield different results for the company's performance.

What opportunities and challenges does Disney face in 2026? Will the stock price rise or fall?

The core of Disney in 2026 is the resonance between recovery and transformation driven by "IP + Experience + AI." Opportunities focus on blockbuster content, theme park expansion, AI-driven cost reduction, and improved streaming profitability; challenges stem from high costs, a weak sports segment, management transition, and capital expenditure pressures.

In FY2026 Q1, Zootopia 2 and Avatar: Fire and Ash achieved massive box office success, driving content sales revenue up 22% year-on-year and directly boosting Disney+ subscribers and ARPU.

Subsequent Marvel films and Star Wars spin-offs will maintain the momentum, creating a "theatrical + streaming" synergy that is expected to reverse the profit decline in the entertainment segment while injecting new energy into consumer products licensing.

The Experiences segment (parks, cruises, and merchandise) saw Q1 revenue of $10.01 billion (+6%), contributing over 70% of operating profit. Domestic park per-guest spending rose 4%, and the launch of new cruise ships increased capacity. With the early opening of the "Frozen" land at Disneyland Paris and expanded cruise routes, coupled with the recovery of global tourism consumption, this segment is expected to maintain high-single-digit growth throughout the year, serving as an earnings stabilizer.

Although Q1 revenue exceeded expectations, profit declines and uncertainty regarding CEO succession have sparked market concerns. The stock price tumbled 7.4% to $104.45 on February 2, and it may fluctuate within the $100-$110 range in the short term while awaiting clear signals regarding fundamentals and corporate governance.

A Citi report maintained a "Buy" rating on Disney, lowering the target price from $145 to $140 on January 16, primarily due to short-term tax and integration pressures from the Fubo acquisition. FY2026 Q1 revenue beat expectations by 1%, and adjusted EPS beat by 5%; per-guest spending at parks increased, while content like Zootopia 2 drove growth in licensing and streaming; AI integration in content production and user recommendations pushed streaming profit margins above 8%.

Citi also noted that higher-than-expected pay-TV subscriber churn, macro pressures on advertising revenue, and box office results failing to meet expectations could lead to a valuation downgrade.

JPMorgan reiterated an "Overweight" rating on Disney with a $138 target price, believing the current 16x forward P/E is below the historical average, leaving room for valuation recovery. Adjusted FY2026 EPS is projected at $6.58 (+11%), with growth concentrated in the second half; domestic park attendance was -1% year-on-year in Q1, but is expected to resume growth in the second half as hurricane impacts fade; content like Avatar: Fire and Ash will drive theatrical and streaming synergy.

JPMorgan stated that Disney's streaming business will achieve an annual profit of $500 million, with the buyback program providing a margin of safety. The early resolution of the YouTube TV dispute in the sports segment has eased subscriber churn pressure.