Is Disney’s rollercoaster worth it? Your share options explained

Walt Disney shares have shot up 23 per cent in the past three months, but are still down 4 per cent since this column last rated the stock as a buy in April. Such is the rollercoaster ride for shareholders in the House of Mouse.
The $209 billion entertainment giant posted a strong set of results last week, with better-than-expected profits in both its streaming business and domestic theme parks.
But what really surprised Disney investors was that the company, which rarely issues guidance for future profits, offered an outlook all the way out to 2027. It is good news, too: Disney thinks that in its financial year ending in September 2025, adjusted earnings per share will grow in the high-single digit percentage range. Then in 2026 and 2027, it will grow by double digits in both years.
• Disney earnings boosted by film success but parks disappoint
It paints a fairytale ending after what has been a difficult few years, with profits struggling to rebound after the pandemic, and a streaming service that has, until very recently, been haemorrhaging billions of dollars.
But this sunny outlook suggests Disney expects resilient consumer spending over the next couple of years. In fact, Disney thinks operating income in its experiences business — which covers its theme parks, resorts and cruise line — will grow between 6 per cent and 8 per cent next year. That is despite the fact that its rival Universal will open a new theme park in Florida in May.
Disney also expects that its entertainment streaming business — which covers Disney+ and Hulu — to achieve a 10 per cent operating margin for the year ending in September 2026. It has only recently become profitable this year, recording an operating income of just $134 million, after making an operating loss of $2.6 billion last year.
More widely it has been a torrid year for traditional media, and Disney has been no exception in this area; revenue from its linear TV business, which includes advertising and cable affiliate fees, dropped 9 per cent, with operating income down 16 per cent.
Its content sales and licensing revenue dropped 15 per cent, though there were some bright spots thanks to recent releases such as the animated film Inside Out 2, which grossed more than $1 billion at the box office within just a few weeks, and the superhero crossover Deadpool & Wolverine. There are still two more major film releases scheduled before the end of the year — Moana 2 and Mufasa: The Lion King.
The 2026 and 2027 guidance suggests great confidence at Disney, especially in the health of consumer spending, although more cautious investors may find it hard to believe that the theme parks business can grow at such a fast rate.
In any case, Bob Iger, the chief executive, will be gone by the end of its forecast period. The Disney head, who initially retired in 2021 after 15 years in the top job, came back in 2022 under a contract due to end in 2026. James Gorman, who will succeed Mark Parker as chairman in January, is leading a committee to identify a successor, with an announcement expected in early 2026. This is a long wait for shareholders, who have watched the rapid rise and falls of Disney’s stock over the past ten years, only for it now to trade not so far off the level it did a decade ago.
There are still plenty of reasons to be optimistic about Disney — not least its huge library of intellectual property, a huge fan base and a very strong offering in streaming, which will be key to restoring the strength of its bottom line.
Though its streaming business has turned a corner on profitability, the market here remains highly competitive and pricing dynamics are still changing: Disney has only recently cracked down on password sharing between multiple households. But at a forward enterprise value to adjusted cash profits ratio of 13.3, well below its five-year average of 21.5 and rival Netflix at 34, Disney shares look relatively good value. Advice BuyWhy Streaming profitability should support group bottom line in the long term
Since the Ashoka India Equity investment trust launched in 2018, it has more than doubled its investors’ money by capturing the impressive growth on the Indian stock market. But it has also comfortably outperformed its benchmark, the MSCI India index, by more than 20 percentage points.
Much of the £453 million portfolio is invested in Indian financial services: the fund’s biggest single investment was in ICICI Bank, the Indian multinational bank, which made up 5.4 per cent of its assets under management as of the end of October. The financial services group Bajaj Finserv came second at 2.7 per cent, followed by State Bank of India at 2.5 per cent.
There are some other sectors in the mix too, including information technology, with the conglomerate Tata Consultancy Services ranking as its fourth biggest holding, also at 2.5 per cent. The managers take a bottom up stock picking approach – which means they do not have to follow the make-up of their benchmark – so the portfolio has a slight bias towards small and medium sized businesses, with more than 60 per cent invested in this area, compared with around a third for the MSCI India index.
The trust trades at a small 0.4 per cent premium to its net asset value, the only one to do so among its investment trust peers that also specialise in Indian stocks.
Prospective investors should also note the fund has a unique fee structure: while the managers do not charge a fixed management fee, the trust can charge a performance fee of 30 per cent of outperformance if it beats its benchmark over periods of three years. This is capped at 12 per cent of its average adjusted net assets over that time. For example, during the three years ended in June, the trust delivered a total NAV return of 76 per cent, beating the index by 10.8 percentage points.
As such, the manager received £2.3 million, compared with net assets of around £450 million. For a fund that has delivered consistently attractive returns for shareholders since launch, this seems a fair shake. Advice Buy Why High-quality portfolio at a very small premium