Disney Turns Corner, But Valuation Still Raises Red Flags

Disney reported strong Q3 earnings with 7% revenue growth and 21% operating income expansion, marking a turnaround in its Entertainment segment. The company also saw continued strength in Experiences, despite a temporary dip in Sports. Management guided to high-single-digit FY26 revenue growth and at least $9B in buybacks.

However, the author is not convinced by Disney's valuation, which appears fair according to various screens. A discounted cash flow (DCF) analysis places intrinsic value near the current price, leading the author to maintain a neutral rating on Disney.