‘Misguided’ Disney Selloff Overlooks House of Mouse’s Streaming Might

Investors aren’t exactly seeing a happily ever after, not after Disney reported fourth-quarter revenues that missed analyst expectations. The stock plunged roughly 8% in trading on Thursday as Wall Street digested disappointing figures from the linear TV and box office side of the business. 

The dip comes after a years-long struggle for House of Mouse stock. After surging to an all-time high in 2021, its price has been ping-ponging between $80 and $125 since 2022 as the company struggles to convince investors it can survive cord-cutting. 

Wish Upon a Streaming Star

Despite Disney’s recent troubles, “2026 is setting up to be a good year,” says Morningstar senior equity analyst Matthew Dolgin. He adds that the stock market’s reaction this week was misguided, spurred by weakness in the non-streaming entertainment revenue, which is no longer a critical driver of profit. 

As Disney celebrates three years of CEO Bob Iger’s un-retirement, its fourth-quarter figures proved it’s still a worthy opponent to streaming giants like Netflix and Amazon Prime Video: 

• Quarterly operating income for the streaming business increased 39% to $352 million. Disney+ added 3.8 million subscribers. 
• “The company has slowly been turning around to become much more dependent on streaming, as opposed to linear,” Dolgin says. “We’ve seen continued strength in the areas that are most important to the future.” 

Operating income of $1.9 billion in the resorts, cruises and theme parks area of the business grew 13% from a year earlier. While licensing revenue — which is based on theatrical film release — fell, that was in comparison to a robust fourth quarter last year, featuring hits like “Inside Out 2” and “Deadpool & Wolverine.” 

Blackout: Disney reported earnings in the shadow of an ongoing distribution battle with Google’s YouTube TV, which has resulted in Disney-owned networks, including ESPN and ABC, being unavailable on YouTube TV since the end of October. Iger said during the earnings call that the company is “working tirelessly” to reach a deal. The Athletic recently reported that one obstacle is an agreement on how much to pay for Disney’s non-sports networks, including Freeform and FX.