Does Disney stock have more upside as Q4 results approach?

Set to report results for its fiscal fourth quarter on Thursday, November 13, momentum in Disney (DIS)  shares has wavered for much of the year. Ahead of its Q4 report, the media giant’s stock is up a subpar +3% in 2025 despite being less than 9% away from a 52-week high of $124 a share.

This somewhat stagnant stock performance comes as Disney has moved past the aggressive cost-cutting measures that long-term CEO Bob Iger implemented when returning to the helm in 2022 after previously leading the company for 15 years.

Although Disney has shown signs of a turnaround since Iger’s return, investors are anxious to see if the company’s new prioritization of long-term growth over short-term cost savings is paying off.

To that point, after achieving a $7.5 billion cost-cutting initiative as part of leadership’s efforts to save money and refocus on profitability, it’s noteworthy that Disney plans to spend $8 billion on capital expenditures this year, compared to $5 billion in 2024.

Disney’s Q4 expectations

Zacks’ projections call for Disney’s Q4 sales to be up 1% to $22.88 billion. That said, Q4 EPS is expected to dip 9% to $1.03 due to pressure on traditional TV and sports broadcasting despite strong performance in streaming and theme parks. 

Overall, Disney is still slated to round out fiscal 2025 with annual earnings spiking 18% to $5.87 per share and total sales increasing 4% to $94.84 billion.

What Wall Street will be looking for:  With Disney’s streaming segment becoming profitable in Q2 2025, Wall Street will be watching for what is hopefully increased profitability. Last quarter, Disney’s streaming segment generated $346 million in operating income after posting its first profit of $293 million in Q2.

Disney’s strategic refocus and expansion

Reallocating resources toward high-growth areas, Disney is aggressively investing in streaming and global theme parks while still cutting costs in corporate overhead and underperforming assets, such as its legacy TV business (ABC, FX, and other linear networks).

Furthermore, Disney is tapping into the growing tourism market in the Middle East, with plans to open a new theme park resort in Abu Dhabi as part of its international expansion strategy. Notably, Disney is investing $6 billion into its Experiences segment, which includes theme parks, cruises, and immersive attractions.

Regarding streaming, Disney has remained focused on content-led growth, along with unifying its platforms for a better user experience and operational efficiency. Disney’s latest move was launching a new direct-to-consumer app for ESPN in August, offering fans unified access to its full suite of sports content without needing a traditional cable subscription.

Disney’s consolidated streaming subscribers

When including Disney+, which is now being merged with Hulu, Disney’s combined 200+ million streamers are in close competition with Amazon’s (AMZN) Prime Video for the most global streaming subscribers behind Netflix (NFLX).

Disney’s attractive P/E valuation

Attractive to the potential for more long-term upside, especially if its probability begins to increase, is that Disney stock is trading at a reasonable 17X forward earnings multiple.

This offers a pleasant discount to the benchmark S&P 500’s 25X and its Zacks Media Conglomerates Industry average of 22X forward earnings. In regard to its major streaming competitors, DIS trades well beneath Amazon and Netflix’s forward P/E multiples of 34X and 44X, respectively.

It’s also important to note that DIS is trading far below its decade-long high of 134X forward earnings and offers a slight discount to the median of 20X during this period. 

Bottom line

Disney stock is certainly making the argument for a move higher, and the Average Zacks Price Target of $135 a share does suggest 20% upside from current levels. Still, Disney’s Q4 results and guidance will be crucial to showing that the company’s refocused strategic expansion will be rewarding.

For now, DIS lands a Zacks Rank #3 (Hold) and has started to regain the notion of being a very viable long-term investment.

Beyond Nvidia: AI’s second wave is here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren’t likely to keep delivering the biggest profits. Little-known AI firms tackling the world’s biggest problems may be more lucrative in the coming months and years.

Want the latest recommendations from Zacks Investment Research? Download 7 Best Stocks for the Next 30 Days. Click to get this free report