I've Been Writing About Disney Stock for 30 Years. Here's Why My Conviction Has Never Been Higher.

You learn a lot writing about the stock market, and I've been doing that for a long time. As a contributor to The Motley Fool since 1995, I've covered a lot of companies. I still get chills down my spine when I come across a new potential investment. It can also be humbling, especially since many of the stocks I wrote about more than 30 years ago are no longer around.

One of the handful of companies I was covering three decades ago that is still thriving is Disney (NYSE: DIS). You wouldn't know it from the stock chart. The shares are down 10% over the past year, while the broader market reaches new heights. Disney stock has been cut nearly in half since peaking a little over five years ago.

I see opportunity in the apathy. Here is why my bullish conviction in the House of Mouse as an investment has never been higher.

Image source: Disney.

Even miracles take a little time

This should be a great time for Disney. Content is king again, after back-to-back years of bidding wars among industry leaders for smaller studios. Disney was one of the first to turn their streaming business profitable, clawing out of the red more than two years ago. It's at the point where its entertainment business -- consisting largely of its diminishing legacy media networks outside of ESPN, ascending streaming operations, and studio content -- is growing on both ends of the income statement. Revenue for the entertainment segment rose 6% in its latest quarter and 7% through the first nine months of the fiscal year.

Its leisure market offerings, led by theme park resorts and cruise ships, are faring even better. Disney's experiences segment reported a 10% increase in revenue, with the operating profit rising 20% for the latest quarter. At a time when smaller theme park operators and larger cruise ship fleets are decelerating, Disney is rolling. Disney's experiences business delivered 39% of the media giant's revenue -- but an even more potent 61% of its segment operating profit -- through the first three quarters of this fiscal year.

Whistle while you work

Disney's ecosystem is unmatched among other media stocks. It doesn't matter where you start on the massive flywheel -- movies, theme parks, cruise ships, televised content. Once you're into one part of its business, it permeates the rest.

The entertainment bellwether operates the world's most-visited gated attractions. Its differentiated cruise ship business has a growing fan base willing to pay a premium over traditional operators. It's also dominant at the box office. Since 2024, Disney has released more than half of the movies that have topped $1 billion in worldwide ticket sales.

Being the best across most of its businesses isn't enough to make a great company a great investment. The valuation has to work, and this is where Disney's improving fundamentals, alongside its falling share price, come into play.

Disney is now trading at less than 16 times what it should earn on an adjusted basis for the fiscal year ending next month, based on its guidance earlier this month, which called for 16% bottom-line growth. There's an extra week in the current fiscal year. Analysts currently see adjusted earnings rising 8% in fiscal 2027 -- in line with Disney's target of double-digit growth in the year-ahead if you account for the extra week in fiscal 2026.

Everything leads to Disney's trading at 14.5 times forward earnings. That's a great price for a great stock. The outlook gets even rosier when you consider that Disney has consistently beaten Wall Street profit targets for more than a year.

Disney is not a perfect investment. It will naturally be vulnerable to a global economic slowdown. It can run into a dry spell on the content front. However, a lot of that is already baked into the shares at today's opportunistic entry price. I've owned Disney for even longer than the 30 years that I've spent covering the iconic entertainer. What's holding you back? It's a good time to start taking a closer look.

Rick Munarriz has positions in Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy.