Walt Disney

Disney’s enduring intellectual-property library can power renewed earnings growth because its flywheel monetises the same characters across entertainment, products and experiences.

• Experiences, including parks, resorts, cruises and consumer products, generated close to 60% of group EBIT on a trailing-twelve-month basis; Disney operates eight of the world’s ten most visited theme parks and earns above 20% returns on invested capital in this business.
• Disney spent about $85 billion under Bob Iger to acquire Pixar for $7.5 billion, Marvel for roughly $4 billion, Lucasfilm for $4.05 billion and 21st Century Fox for $69.5 billion, expanding the IP library that supports the flywheel.
• Toy Story 5 generated more than $1.1 billion at the global box office and, according to Disney’s CFO, drove the highest consumer-products growth rate in 20 years, illustrating how one creative investment can generate revenue across streaming, parks and cruises.
• Parks, resorts and cruises produced $8.5 billion of operating income and consumer products $2.4 billion in the twelve months to June 2026; Disney is committing $60 billion to Experiences over ten years, while domestic attendance rose 3% in the latest quarter and cruise demand exceeded supply.
• Streaming reached a 13% operating margin in the June quarter and generated $2.1 billion of operating income, versus consensus estimates of $4.5 billion to $5 billion by 2028; Disney trades at about 13–14 times FY27 earnings, near the low end of its historical range.

Takeaway: PM Capital sees execution on Experiences investment, streaming growth and share repurchases driving high-single-digit to low-double-digit medium-term earnings growth and justifying a higher valuation, although risks include weaker creative output, competition from AI-generated and creator content, and a US consumer downturn.