Our Highest Conviction Call on Disney Points to $110 on Earnings Growth

Disney's stock has drifted in a sideways lane while its underlying business accelerates, creating a setup for a bullish thesis. 24/7 Wall St. recommends a buy with a price target of $110.07, implying roughly 8.7% upside from around $101. In Q2 FY26, adjusted EPS reached $1.57 on revenue of $25.168 billion, up 6.55% year over year, while operating income rose 31.29%. Entertainment SVOD margins advanced to 10.6%, and Disney+ and Hulu combined subscribers reached 196 million. Disney raised its buyback target to at least $8 billion and highlighted milestones such as ESPN DTC launch and the NFL Network deal as levers for growth. The bull case leans on streaming-margin expansion and guidance for double-digit FY27 EPS growth, supporting a valuation above $120 if execution meets expectations. The bear case cites a Q1 FY26 free-cash-flow swing to negative $2.278 billion due to wildfire-related tax payments and higher programming costs that could weigh on sentiment. Analysts acknowledge that a higher-margin streaming engine and record experiences revenue could sustain a longer upside, but execution risk remains.