Disney Calls Stock Undervalued, Raises Buybacks to $9 Billion
Drew attention after the company said its shares were undervalued and lifted buybacks to at least $9 billion. The company’s fiscal Q3 2026 results also showed…
NEW YORK — Disney stock came into focus after The Walt Disney Co. said its shares were undervalued in fiscal Q3 2026 and lifted its buyback plan to at least $9 billion. The company reported earnings before the market opened on August 5, then followed with a post-earnings rally, even though the shares are still down 9.25% for the year.
The message from management was clear. Disney is betting that stronger earnings, a recovering streaming business and heavier share repurchases can narrow the gap between its business performance and its stock price.
Disney stock and the gap with earnings
Disney’s shares have “practically gone nowhere over the last decade,” according to the Yahoo Finance report, even as the company’s earnings have kept growing. That disconnect has pushed down its valuation, with a forward price-to-earnings multiple of 14.37 times.
In its fiscal Q3 shareholder letter, Disney said it finds its shares “undervalued” and backed up that view with capital returns. The company increased its share buyback program for the current fiscal year and now expects to repurchase at least $9 billion of its shares. The original plan for the year was $7 billion, which the company later raised to $8 billion.
Disney also plans to use the $1.2 billion cash proceeds from its stake sale in A+E Global Media to repurchase shares. That adds more firepower to a buyback plan that already signals confidence from management. Short sentence. Big signal.
Streaming turns profitable again
The turnaround in streaming matters because it has been one of the biggest drags on Disney stock in recent years. In fiscal Q3, Disney’s streaming business posted an operating profit of $712 million. At its peak, Disney’s streaming business lost $1.5 billion in a quarter, although the report noted those figures may not be strictly comparable because reporting changes were made over time.
That shift is important for investors tracking Disney’s broader earnings mix. A business that once burned cash is now helping support overall results, and that gives the market a fresh reason to reassess the stock’s long-running underperformance.
Parks and streaming both helped results
Disney’s experiences division, which includes parks and cruises, posted revenue of $9.97 billion, up 10% year over year. Chief Financial Officer Hugh Johnston told CNBC, “Domestically we're doing extremely well right now,” and said park attendance in the U.S. was up 3% while per capita spending increased 4%.
Johnston also pointed to “very strong attendance” at Walt Disney World in Orlando, Florida. He said those numbers were “somewhat different” from what its competitor saw, as well as from reported traffic through Orlando International Airport.
The entertainment streaming unit also kept growing. Revenue for that segment increased 11% to $5.53 billion, lifted by more subscribers, price hikes and higher advertising revenue. Disney said the overall entertainment business continued to benefit from both streaming and the parks unit, even as it slightly missed revenue estimates.
For investors watching Disney stock, the immediate question is whether that mix can keep improving fast enough to justify the company’s valuation reset. The next test will come in whether the buyback pace, streaming profitability and parks strength can hold through the rest of the fiscal year.
