Disney (DIS) is giving investors another reason to watch its streaming business as the entertainment giant raises prices across Disney+ and Hulu. Effective Sept. 23, the ad-free Disney+ Premium Plan increased by $2.50, or about 13%, to $21.49 per month. However, existing subscribers will see the higher prices on their next billing cycle.
Disney is also raising the price of its ad-free Disney+/Hulu bundle by $2 to $21.99 per month, while the ad-supported bundle will remain unchanged at $12.99 per month. Meanwhile, standalone Disney+ and Hulu plans with ads will each increase by $0.50 to $12.49 per month. Plus, the ad-supported Disney+, Hulu, and ESPN bundle will increase by $2 to $21.99 per month, while the ad-free Premium Select version of the three-service bundle will rise by $3 to $32.99 per month.
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This latest pricing move comes as Disney continues to focus on improving the profitability of its direct-to-consumer business. In its fiscal third quarter, the company said operating income from its Entertainment segment, which includes Disney+, surged 64% while its streaming business reached a double-digit operating margin. Still, it remains to be seen whether higher subscription prices can translate into stronger revenue and margins without triggering meaningful subscriber losses.
About Disney Stock
Disney is an iconic entertainment and media conglomerate that operates across film and television production, streaming services, theme parks and resorts, sports networks, and consumer products. Headquartered in Burbank, California, the company's portfolio includes globally recognized brands such as ABC, ESPN, Marvel, Pixar, and Lucasfilm. The company distributes content through its flagship platforms like Disney+, Hulu, and ESPN+. Leveraging nearly a century of market presence, Disney has grown into one of the world’s leading entertainment companies with a market capitalization of $183 billion.
DIS stock has remained under pressure in 2026, although shares staged a notable rebound in recent sessions. DIS stock closed at $106.15 on Sept. 25, up roughly 0.5% after rising more than 2% in the previous session. These gains followed a two-session pullback and came as investors digested Disney’s latest streaming strategy, including the company’s newly announced price increases.
Despite the recent bounce, shares remain below the 52-week high of $117.09 and are down about 7% over the past year. On a year-to-date (YTD) basis, DIS stock is also down roughly 7%, highlighting the stock’s relatively weak performance in 2026. Shares of Disney have also declined about 2% over the past month.
Disney shares have faced pressure in 2026 amid concerns over weaker attendance at theme parks, higher production costs, and softness in its traditional TV and film businesses. The stock is trading at a modest premium compared to industry peers at 15.2 times forward earnings.
www.barchart.com Disney's Q3 Performance Was Largely Positive
Disney reported its Q3 fiscal 2026 results on Aug. 5. Revenue increased 7% year-over-year (YOY) to $25.2 billion, while income before income taxes rose 14% to $3.6 billion. Total segment operating income was particularly strong, climbing 21% YOY to $5.6 billion.
Disney’s bottom-line performance was also notable. Adjusted EPS increased 28% YOY to $2.06 from $1.61, exceeding the consensus estimate. Plus, cash provided by operations rose 33% to $4.9 billion, while free cash flow surged 63% to $3.1 billion, providing additional support for Disney’s plans.
At the segment level, Entertainment remained a major growth driver. Revenue increased 6% to $11.3 billion, while segment operating income jumped 64% to $1.7 billion. Subscription and affiliate fees rose 12% YOY, helped by higher effective pricing and subscriber growth.
Within streaming, Entertainment SVOD revenue grew 11%, with subscription revenue up 15%. SVOD operating income more than doubled to $712 million from $329 million while the SVOD operating margin reached 12.9%.
Disney’s Experiences business delivered another strong quarter, with revenue increasing 10% to $10 billion and operating income rising 20% to $3 billion. Meanwhile, the Sports segment was the main area of weakness. Revenue still increased 4% to $4.5 billion, but operating income declined 17% to $858 million. Disney said the decline was driven in part by four-game sweeps during the early rounds of the NBA playoffs and the “impact of a network carriage dispute.”
For Disney+ and Hulu, the Q3 results are particularly relevant to the company’s pricing strategy. Disney said Entertainment SVOD subscription revenue increased 15% YOY, driven by both higher rates and subscriber growth. Management also reported a decline in Disney+ churn during the quarter. That combination is important as Disney moves ahead with additional price increases and the company attempts to raise average revenue per subscriber while keeping cancellations under control.
Disney reiterated its fiscal 2026 outlook, calling for adjusted EPS growth of 12% excluding the 53rd week and approximately 16% growth including the extra week. The company also expects Q4 total segment operating income of about $4.9 billion with the 53rd-week contribution. However, management noted that Q4 Entertainment results will face pressure from weaker-than-expected Moana box-office performance and a softer advertising environment, particularly in domestic streaming.
Analysts remain optimistic. They expect EPS to climb to $6.91 in fiscal 2026, up 17% YOY, before surging another 8% YOY to $7.47 in fiscal 2027.
What Do Analysts Expect for DIS Stock?
Goldman Sachs recently reiterated its “Buy” rating on Disney stock but lowered its price target to $140. The reaffirmation comes as Disney continues to focus on improving the profitability of its streaming business. Earlier this month, Bernstein also reiterated a “Buy” rating on DIS stock with a $129 price target.
Wall Street is highly bullish on Disney's prospects. Overall, DIS stock has a consensus “Strong Buy” rating. Of the 32 analysts covering the stock, 23 have a “Strong Buy” rating, four suggest a “Moderate Buy,” four analysts have a “Hold” rating, and one analyst has a “Strong Sell.”
The average price target of $127.77 suggests potential upside of 21% from current levels. Meanwhile, the Street-high target price of $144 suggests that the stock could rally as much as 36% from here.
www.barchart.com On the date of publication, Subhasree Kar did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.