Experiences segment is primary growth driverPhillip Securities Research Initiates Coverage of Disney with Accumulate Rating January 22, 2026
Company Overview
The Walt Disney Company is a leading global entertainment powerhouse with a diversified portfolio spanning content creation, streaming services, sports media, and theme park operations. The company’s competitive advantage lies in its unrivalled intellectual property ecosystem, anchored by globally beloved franchises including Disney Animation, Pixar, Marvel, and Star Wars. This extensive IP portfolio enables Disney to maintain strong consumer engagement across multiple platforms, driving multiple and complementary revenue streams.
Key Investment Highlights
Disney’s strategic positioning centres on three critical factors that underpin its investment appeal. First, the company benefits from a comprehensive entertainment ecosystem that leverages its iconic franchises to drive monetisation at scale, supporting sustainable long-term revenue growth. Second, Disney has successfully demonstrated its ability to adapt to changing consumer preferences by prioritising its direct-to-consumer streaming business while transitioning away from traditional linear television.
Most notably, the streaming segment achieved profitability in the second half of 2024, marking a significant operational milestone.
Primary Growth Driver: Experiences Segment
The Experiences segment serves as Disney’s primary growth engine, accounting for 45% of total revenue and consistently delivering high-single- to low-double-digit year-over-year growth. This segment encompasses theme parks, resorts, and cruise operations, benefiting from resilient attendance patterns and higher per-capita guest spending and effective yield management strategies despite competitive pressures in the entertainment and leisure industry.
Streaming Success and Digital Transformation
Disney’s strategic pivot towards streaming has yielded positive results, with the direct-to-consumer business turning profitable. This achievement reflects the company’s successful adaptation to evolving consumer viewing habits and validates its investment in digital content distribution.
Achieving profitability positions Disney more competitively within an increasingly crowded global streaming landscape and strengthens the overall earnings profile of the group.
Research Recommendation
Phillip Securities Research has initiated coverage of The Walt Disney Company with an ACCUMULATE rating and a target price of US$130.00. The valuation methodology employs a discounted cash flow analysis utilising a weighted average cost of capital of 7.7% and a long-term growth rate of 3.5%. This recommendation reflects confidence in Disney’s ability to leverage its diversified business model and capitalise on the continued global expansion of streaming services alongside the resilient post-COVID recovery of its experiences segment.
Frequently Asked Questions
Q: What is Phillip Securities Research’s recommendation and target price for Disney?
A: Phillip Securities Research initiated coverage with an ACCUMULATE rating and target price of US$130.00, based on a DCF analysis using a 7.7% WACC and 3.5% growth rate.
Q: What makes Disney’s intellectual property ecosystem unique?
A: Disney possesses an unrivalled IP ecosystem anchored by major franchises including Disney Animation, Pixar, Marvel, and Star Wars, which supports strong consumer engagement across platforms and enables monetisation at scale.
Q: Which segment is Disney’s primary growth driver?
A: The Experiences segment is Disney’s primary growth driver, contributing 45% of revenue and delivering consistent high-single to low-double-digit year-over-year growth through theme parks, resorts, and cruise operations.
Q: When did Disney’s streaming business become profitable?
A: Disney’s streaming segment turned profitable in the second half of 2024, marking a significant milestone in the company’s digital transformation strategy.
Q: How has Disney adapted to changing consumer viewing habits?
A: Disney has prioritised its direct-to-consumer streaming business while transitioning away from linear television, successfully adapting to evolving consumer preferences in entertainment consumption.
Q: What factors support the Experiences segment’s strong performance?
A: The Experiences segment benefits from resilient attendance, higher per-capita guest spending, and effective yield management strategies, maintaining strong performance despite competitive pressures.
Q: What is Disney’s strategic positioning for long-term growth?
A: Disney is well-positioned to monetise its IP at scale through continued global streaming expansion and the resilient post-COVID recovery of its experiences segment, underpinning long-term revenue growth.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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About the author
Helena Wang Qian
Helena covers Hardware/Marketplaces/ETF. Helena graduated with a master's degree in Financial Technology from Nanyang Technological University.
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