Disney Boosts Buybacks as Shareholders Eye Undervalued Stock

Disney's shares have underperformed in recent years, but the company is convinced its stock is undervalued. In fact, it has increased its share buyback program to $9 billion for the current fiscal year, with an additional $1.2 billion from the sale of its stake in A+E Global Media.

The company's earnings have been growing steadily over the years, and its streaming business has seen a significant turnaround, posting an operating profit of $712 million in fiscal Q3. This is a marked improvement from the $1.5 billion loss it incurred at its peak.

Disney CEO Josh D'Amaro emphasized the company's flywheel effect, where success in one area compounds into value elsewhere. For example, the success of The Mandalorian and Grogu drove growth in retail sales for the Star Wars franchise, attracted guests to Disneyland and Walt Disney World, and led to significant engagement in gaming.

Sell-side analysts are also optimistic about Disney's prospects, with a mean target price of $128.87, representing a 25.5% increase from current levels. The stock has a consensus rating of 'Strong Buy' from the 32 analysts polled by Barchart.