Can Disney Stock Stay Above $100 This Time?

It's a tale as old as time, as they say in Walt Disney's (NYSE: DIS) Beauty and the Beast.

The beauty? Disney does something that makes it attractive to Wall Street. It could be another box office blockbuster, general market appreciation that content is king, or -- as investors saw Wednesday morning -- a blowout financial update. The stock price leapt its way out of the high double digits, landing north of $100.

Then comes the beast. It could be a theatrical flop, slowing turnstile clicks at its theme parks, or just the general frustration with Disney's tendency to fall back into single-digit revenue growth. It may feel like a recurring dream that turns into a nightmare, but this is the fifth consecutive calendar year Disney shares have hit triple digits, only to buckle below $100 later in the year.

Can it be different this time? Let's see if this week's fiscal third quarter is the pixie dust that finally banishes double-digit stock prices to Neverland.

Broadway star Kristin Chenoweth poses with a fire-breathing Maleficent dragon. Image source: Disney.

When you wish upon a star

Investors in the House of Mouse were looking for a break. Disney stock has fallen 15% over the past year, even as the media buyer's buyout frenzy has propelled smaller content creators higher.

Expectations were high heading into this week's quarterly update. Wall Street pros saw revenue rising 7% to $25.4 billion, its strongest year-over-year increase in more than three years. The profit target for adjusted earnings was $1.85 per share, a 15% jump.

The actual results were mixed. Revenue clocked in at $25.2 billion, still a 7% increase but just shy of where analysts figured Disney would land. Adjusted earnings were better, soaring 28% to reach $2.06 a share. It was Disney's first double-digit percentage earnings beat on the bottom line in more than a year.

Second star to the right, and straight on 'til morning

The strong theatrical showing of Toy Story 5 -- Disney's first movie to top $1 billion in global ticket sales this year -- helped fuel investor excitement, with much of the proceeds trickling into the current fiscal quarter. The more bullish news came from its gated attractions, with Disney reporting robust theme park attendance.

Unlike rival Comcast (NASDAQ: CMCSA), which warned late last month that there was softness at its Universal Studios theme parks in June and bleeding into July, Disney saw attendance at its global theme parks rise 4% in the fiscal third quarter. Revenue for the Experiences segment, which includes its gated attractions, cruise ships, and consumer products (for now), rose 10% for the quarter. Its operating profit doubled that pace, climbing 20%. Experiences accounted for 39% of Disney's revenue but 54% of its segment operating income for the quarter.

Disney also announced that consumer products will shift from the Disney Experiences segment to the studio business. It's a move that makes sense, since content drives merchandise sales and licensing deals. It will also free the segment to post stronger growth with its theme parks holding strong and its fleet of cruise ships expanding.

Bringing it all together, you can buy the entertainment leader for less than 14 times next year's projected earnings, and even lower if you look out to the following fiscal year.

DIS data: YCharts.

Getting Disney at a historically low forward earnings multiple is nice. Knowing that analysts are about to boost their profit targets -- driving the P/E ratio even lower -- is even better.

Disney remains confident that it will grow adjusted earnings in the low double digits in the new fiscal year 2027, which starts in less than two months. The company is eyeing 12% growth in adjusted net income for this fiscal year. With a healthy pipeline of new content, cruise ships, and theme park attractions, and a fan expo next weekend to peel back the curtain on some of those initiatives, Disney should break out of this five-year rut sooner rather than later.

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.