The global entertainment and media market is expected to reach more than 3.5 trillion by the end of 2029 as the industry moves away from traditional linear television and leans more on streaming-first business models. Subscription video streaming revenue in the US alone is expected to continue increasing through 2026, while the overall global video streaming market is projected to reach $98.37 billion in revenue this year.
Even with that change, large legacy media companies still face real pressure. Disney’s (DIS) fiscal fourth-quarter 2025 results showed entertainment division revenue fell 6% and linear network operating income fell 21%, even as its direct-to-consumer streaming business posted operating income of $352 million.
Former House Speaker Nancy Pelosi has revealed that she sold approximately $5 million in Disney stock as part of a $69 million portfolio reorganization. That shakeup included trimming stakes in Apple (AAPL) and Nvidia (NVDA), while rotating into call options and dividend-paying financial stocks. Pelosi’s sale to Disney came months after Disney Chairman James Gorman bought $2 million in DIS stock at $111.89 in December, a move that pointed to domestic confidence.
With one high-profile insider buying and another selling, what signal should investors follow, or does Disney’s mixed fundamental picture warrant a deeper look before taking any action? Let’s find out.
Disney is a broad entertainment company that makes money from theme parks, streaming services like Disney+ and Hulu, linear television and a large library of content that it sells in movies, licenses and consumer products.
Over the past 52 weeks, the stock is down about -0.56% and about -0.85% year-to-date (YTD), showing that investors are still not completely sold on Disney’s long-running turnaround plan.
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Valuation-wise, the stock is trading at about 16.96 times forward earnings, slightly above the industry’s forward multiple of 16.62 times, suggesting the market is still expecting some improvement in growth and earnings rather than treating the company as a lost cause.
On the bottom line, revenue in fiscal 2025 rose 3% to $94.4 billion, even though fourth-quarter revenue was basically flat at $22.5 billion, pointing to steady but not rapid growth. Revenue before income taxes more than doubled in the fourth quarter to $2.0 billion and rose to $12.0 billion for the year from $7.6 billion, showing the benefits of cost cuts and tighter control of content spending.
The segment’s total operating income rose 12% over the year to $17.6 billion, suggesting the improvement was spread across the business and was not driven by a single event. Diluted earnings per share for the fourth quarter rose to $0.73 from $0.25, and for the full year rose to $6.85 from $2.72, while adjusted earnings per share rose 19% to $5.93, supporting the idea that earnings are improving in the core business.
With an annual dividend yield of around 1.14%, a forward payout ratio near 17.33%, and just one year of semi-annual dividend increases so far, Disney appears to be rewarding shareholders again while maintaining ample capacity to fund growth.
Disney’s growth case right now is supported by deals that strengthen its intellectual property position and expand how it can make money from that intellectual property. The long-term media IP licensing agreement with Adeia gives Disney access to Adeia’s entire portfolio of media IP in a single agreement and, equally important, resolves all pending litigation between the two companies tied to that technology.
In terms of experience, collaboration in Formula 1 is simple. Disney is combining its characters and storytelling with a major global sport and then focusing that attention on content, live events and merchandise sales. The partnership launches at the Las Vegas Grand Prix with a show at the Bellagio Fountains, character appearances and an exclusive line of Formula 1 merchandise, creating a playbook Disney can repeat around big races and fan moments.
Then there is the deal with WEBTOON Entertainment, which targets digital comics and mobile reading. Disney and WEBTOON plan to build a new digital comics platform that brings together current runs and decades of past comics across Disney’s portfolio, including Marvel, Star Wars, 20th Century Studios and more. For the first time, more than 35,000 comics from Marvel, Star Wars, Disney, Pixar and 20th Century Studios would be housed in a subscription service, created and operated by WEBTOON, with vertical and traditional formats and a mix that also includes select WEBTOON originals.
Street estimates now call for an average EPS of 1.56 for the current quarter (12/2025), up from 1.76 a year ago, which equates to -11.36% year-over-year (YOY). From there, expectations improve: for the next quarter (03/2026), the average estimate goes to 1.63 compared to 1.45 last year, which implies a growth of +12.41%. Looking further, analysts see 6.58 for FY2026 (ended 09/2026) compared to 5.93 last year, a gain of +10.96%.
That long-term setup is what the bulls continue to target. JP Morgan’s David Karnovsky reiterated a buy and a $138 price target, citing streaming profitability, park strength and improving content economics as reasons why Disney can command a higher multiple over time. Needham’s Laura Martin also stuck with a Buy and a $125 target, arguing that the market still doesn’t fully recognize Disney’s long-term earnings-per-share growth trajectory.
Taking a step back, among 31 analysts, the consensus rating is “Strong Buy” and the average target is $134.89. With the stock at $112.80, that suggests an increase of about 19.58%.
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Pelosi selling Disney doesn’t automatically mean you should sell too, because her move seems more like a portfolio shakeup than a clear verdict on Disney’s business. If you own DIS, the clearest choice is to base your decision on whether you believe the earnings trajectory the Street is modeling can actually play out, since that’s what ultimately supports the bull case. Shares are more likely to rally more than break down from here, but with volatile stretches around earnings and any linear TV or streaming headlines. If you can’t tolerate that volatility, cutting back makes sense; If you can, holding is the best bet.
As of the date of publication, Ebube Jones had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
