Walt Disney Has Been a Streaming Story for Years. Here's How The Story Has Changed.
Key Points
New CEO Josh D’Amaro comes from the Experiences segment, which is Disney's cash cow.
Disney is spending billions to expand its parks and cruise line over the coming years.
A compelling valuation and cleaner financials make Disney a strong rebound candidate.
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It's hard to remember a time before Walt Disney Company (NYSE: DIS) was a streaming stock. Disney invested billions of dollars over more than two decades in media acquisitions and, more recently, in streaming businesses under former CEO Bob Iger, who came from a media background.
New CEO Josh D'Amaro succeeded Iger in March 2026. D'Amaro previously served as Disney's Experiences chairman, setting the company up for a new strategic focus under new leadership with new expertise.
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Here's why Disney stock's story could soon change for the better.
Image source: The Motley Fool.
The story isn't changing; it already has
Disney's streaming efforts ultimately succeeded. Disney has become a streaming leader, ending its fiscal year 2025 with approximately 196 million subscribers between Disney+ and Hulu. Streaming has also turned profitable, generating $1.3 billion in operating income last year and $450 million in the first quarter of fiscal year 2026.
But streaming isn't Disney's moneymaker, not by a long shot. Disney's Experiences segment, which houses the company's theme parks, cruise line, and consumer products, raked in $3.3 billion in operating income in the first quarter of fiscal year 2026 alone.
In all, the segment accounted for 38.5% of Disney's total revenue in the first quarter, but 71.9% of operating income. It's the golden goose at the House of Mouse. Investors should love the fact that Disney's new CEO rose from what's now its most important business unit.
Disney is leaning into its strengths
Josh D'Amaro was heading Disney's Experiences segment in 2023 when the company announced plans to invest $60 billion over 10 years to expand its parks, and late last year, Disney announced plans to double its cruise line fleet by 2031.
It's usually wise to lean into your strengths, and it represents a refreshing new chapter after Disney stock has languished for years. Including dividends, the stock is up just 6% over the past decade. It's been a tough stretch, marred by Disney paying down debt following its $71.3 billion Fox acquisition and years spent growing its streaming base.
Today, Disney is in a much better financial position. It reduced leverage to 2.3x earnings before interest, taxes, depreciation, and amortization (EBITDA) and reinstated its dividend. The stock now trades at less than 15 times its 2026 earnings estimates, a compelling valuation for a company that analysts estimate will grow earnings by 11% to 12% annually over the next three to five years.
Disney's streaming story hasn't necessarily been a great one for investors. Fortunately, the sequel, built around a strong Experiences business, looks far more promising.
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy.
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