Will Disney's Experiences Investments Pay Off Over the Long Term?

Disney’s DIS growing investments in the Experiences segment are strengthening its ability to deliver sustainable long-term returns. As global demand trends and pricing power improve, the company is increasing investment in a proven, high-return segment. With roughly $10 billion in operating income in fiscal 2025, the Experiences business demonstrates that new investments are driving incremental growth on a strong margin basis.

Looking ahead, Disney’s multi-year expansion pipeline significantly strengthens the long-term growth outlook for its Experiences segment. The company plans to add two new cruise ships — Disney Destiny and Disney Adventure — in the near term, expanding the fleet to eight vessels, with five additional ships scheduled beyond fiscal 2026. Disney is set to open World of Frozen at Disneyland Paris this spring and is planning a new theme park in Abu Dhabi. Entry into fast-growing regions like Asia and the Middle East is designed to expand capacity and reduce geographic concentration. Over time, these initiatives should lift attendance, extend guest stays and boost per-capita spending, strengthening cash flow visibility beyond the near term.

While pre-opening costs and dry-docking costs are expected to put pressure on margins in fiscal 2026, these near-term headwinds reflect investments in long-term, revenue-generating assets. As new ships and attractions ramp up, operating leverage is expected to improve.

Importantly, management considers Experiences as a long-term investment rather than a cyclical expansion. Strong customer satisfaction, resilient demand despite macroeconomic uncertainty and an expanding international footprint reinforce the view that these investments will support long-term earnings stability.

Disney Confronts Intensifying Theme Park Competition

Comcast CMCSA and Six Flags Entertainment Corporation FUN are key competitors to Disney’s Experiences segment.

Comcast’s theme park business, led by Universal Parks & Resorts, shows clear strength from popular, IP-driven attractions and smart investment. The opening of Epic Universe in Orlando helped Comcast deliver nearly 19% theme park revenue growth and more than 13% EBITDA growth, supported by higher attendance and stronger guest spending. Management’s focus on ride expansion and operating leverage allows Comcast to efficiently scale new parks and monetize franchises like Jurassic World, reinforcing its competitive edge.

Six Flags benefits from its large scale as North America’s leading regional park operator and strong local-market focus. Six Flags’s best-performing parks generate about 70% of park-level EBITDA, supported by steady investment in rides, attractions and park upgrades that boost guest satisfaction and repeat visits. With parks located in dense population areas, flexible pricing and tighter cost control, Six Flags continues to strengthen margins and compete effectively in the theme park and resort market.

DIS’ Share Price Performance, Valuation & Estimates

Disney shares have fallen 7.2% over the past six months compared with the Zacks Consumer Discretionary sector and the Zacks Media Conglomerates industry’s decline of 9.3% and 13.3%, respectively.

DIS’ Six-Month Price Performance

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From a valuation standpoint, DIS stock is currently trading at a forward 12-month price/earnings ratio of 16.61X compared with the industry’s 17.89X. DIS has a Value Score of B.

DIS’ Valuation

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According to the Zacks Consensus Estimate, Disney’s earnings are projected at $6.58 per share for fiscal 2026 and $7.33 for fiscal 2027. Estimates for fiscal 2026 are down by a couple of cents over the past 30 days, while fiscal 2027 projections have declined by 4 cents.

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DIS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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