3 Reasons Disney Stock Can Bounce Back in the Second Half

The past few years have been great for Walt Disney (NYSE: DIS), but not necessarily its shareholders. Despite delivering five consecutive fiscal years of growing revenue -- on widening adjusted net margins in each of the last four -- the stock has lost nearly half of its value in that time.

Even the past year of modestly accelerating revenue growth, box office domination, and skeptics-defying gains at its theme parks hasn't translated to a winning stock chart. Disney shares have fallen 20% over the past 12 months.

The bears may have momentum, but it might not be that way for long. Let's delve into three bearish knocks on Disney, and how the company is better positioned than you might think to bounce back on all fronts. Sit back, pass the popcorn, and let's roll.

Image source: Disney.

1. Hooray for Hollywood

Bear thesis: Did you see Moana bomb at the multiplex earlier this month? Disney needs to stop making these sequels and live-action reboots of animated classics and start focusing on original properties.

Bull reality: Moana had a disappointing opening weekend, and it will likely result in a one-time charge down the line. It doesn't mean that the blueprint is toast. Last year's live-action remake was Lilo & Stitch; it was one of just four movies to top $1 billion in worldwide ticket sales.

Disney won't always hit it out of the park. It currently has the country's highest-grossing movie of the year in Toy Story 5, but its next-biggest year-to-date ticket seller is sixth. There are still plenty of major releases in the pipeline at the House of Mouse, including Marvel's Avengers: Doomsday in December, which should be the top draw among 2026 theatrical releases.

There were seven movies in 2024 and 2025 that cleared $1 billion in box office receipts. Disney put out six of them. As an aside, they were all sequels or live-action reboots of existing properties (even the seventh film, China's Ne Zha 2). Disney won't have the same global dominance in 2026, but it's still an indisputable hit factory.

2. As the turnstiles turn

Bear thesis: A theme park vacation isn't for the weak of wallet. Inflationary pressures and factors weighing on international travel can't help in the near term. Didn't you see Comcast warning about softness for its gated attractions in this week's earnings report?

Bull reality: Comcast did warn that it was experiencing softness at its theme parks in June and that weak trend has carried over into the first few weeks of this quarter. Disney and Comcast compete in the same two U.S. markets of Central Florida and Southern California. The situation could pose some near-term challenges, but Disney isn't Comcast.

Comcast may have opened Epic Universe in Orlando last year, but in the process, it has neglected its legacy parks. It's now been a little over five years since it added a major, well-received attraction (Velocicoaster at Islands of Adventure in June 2021) at its three older Universal Orlando destinations.

Disney is marching to a different beat. Its theme parks held up well over the past year, even when many figured the arrival of Epic Universe would crush the industry leader. With Disney and Comcast currently undergoing major additions in their Florida resorts, the long-term prospects remain strong. Expect Disney to make some major theme park announcements at its D23 expo next month, its first fan event since new CEO Josh D'Amaro took over.

3. Historical value

Bear thesis: Disney stock's fall in recent years reflects its weakening fundamentals and difficult operating environment for media conglomerates.

Bull reality: The rebuttal here starts with a simple chart, showing how cheap Disney stock has become.

DIS data: YCharts.

Disney's business has improved dramatically in recent years. It posted a double-digit net margin in fiscal 2025, something that it hadn't done in six years. Between Disney+ turning profitable two years ago and the swift recovery of its consumer experiences business, Disney is faring much better than its meandering stock chart suggests.

The chart above tracks two earnings-based valuation multiples. The orange line is the P/E ratio for the fiscal year 2026, which ends in two months. The purple line looks out to the new fiscal year that starts in October. Did you know Disney was trading for less than 14 times this year's earnings and just 12 times next year's multiple?

It's a story that isn't really being told. Estimates have inched higher since just before it posted its fiscal second-quarter results in May. Before you argue that analysts are being too optimistic, keep in mind that they have underestimated Disney's earnings in each of its last quarterly updates.

Reels, wheels, and deals? Disney is ready to bounce back in the final five months of 2026.

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