Disney lifts buybacks to a nine-year high as streaming turns profitable and parks hold firm

HONG KONG, Aug. 10. As media conglomerates accelerate their retreat from legacy cable assets, the streaming operations left standing are beginning to deliver the margins the market once doubted. The Walt Disney Company (NYSE: DIS) posted fiscal third-quarter free cash flow of $3.1 billion, lifted by a 32% jump in operating cash flow, and announced plans to spend at least $9 billion on share repurchases this fiscal year, matching the $9.4 billion it spent buying back stock in fiscal 2017.

Streaming and parks deliver on the operating line

Disney's direct-to-consumer division, anchored by Disney+ and Hulu, grew revenue 11% year over year in the quarter ended June 27 and posted an operating margin of 13%. The division was losing more than $1 billion per quarter only a few years ago. That reversal is the clearest single operational shift in the results.

The experiences segment, covering theme parks, resorts, and cruises, reinforced the picture. Revenue rose 10% year over year and operating income climbed 20%. Park attendance grew 3%, per-capita ticket spending came in 5% higher, and resorts and vacations posted a 17% revenue increase, which the company attributed to two new cruise ships launched over the past year. At the box office, Toy Story 5 has crossed $1 billion in worldwide ticket sales.

Asset sales underpin the capital return commitment

Funding the $9 billion buyback commitment draws on balance sheet cash as well as operating cash generation. Chief Financial Officer Hugh Johnston said on the Q3 2026 earnings call that the program deploys cash set aside for an OpenAI deal and anticipated proceeds from the sale of Disney's 50% stake in A+E Global Media, a transaction expected to bring $1.2 billion. Disney divested the stake to simplify the portfolio.

The shares trade at a price-to-earnings ratio of 16.8, a 33% discount to the S&P 500. The current price is $104.68. In August 2015, the stock changed hands at $108.55. Eleven years of business transformation, including the de-emphasis of cable networks, has produced no net price appreciation.

The macro read-through

Analyst consensus calls for free cash flow to grow in each fiscal year from 2025 through 2028. Disney's own guidance targets double-digit adjusted earnings-per-share growth in fiscal 2027, following a projected 12% rise in the current fiscal year, with analysts projecting a further 10.6% EPS gain in fiscal 2028.

Against the backdrop of a market that has declined to assign Disney a premium multiple for more than a decade, a buyback program funded in meaningful part by asset disposals rather than organic cash generation leaves the valuation re-rating question open heading into the next reporting cycle.