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We came across a bearish thesis on The Walt Disney Company on Accrued Interest’s Substack by Simeon McMillan. In this article, we will summarize the bears’ thesis on DIS. The Walt Disney Company’s share was trading at $109.56 as of January 28th. DIS’s trailing and forward P/E were 16.15 and 16.81 respectively according to Yahoo Finance.
The Walt Disney Company operates as an entertainment company in Americas, Europe, and the Asia Pacific. DIS is positioned to underperform the S&P 500 in 2026, primarily due to the growing drag from its linear television networks, which continue to weigh on both financial performance and strategic flexibility. Despite Disney’s diversified portfolio, its broadcast and cable assets—particularly ABC, ESPN, and legacy cable channels—remain structurally challenged as cord-cutting accelerates and advertising economics deteriorate.
A spin-off of these television assets appears increasingly inevitable, but meaningful action is unlikely before the scheduled retirement of CEO Bob Iger at the end of 2026. Iger’s legacy, including the 2019 acquisition of Fox’s television assets, creates a strong incentive to delay a restructuring that would implicitly acknowledge strategic missteps, leaving the burden of execution to his successor. Peer actions reinforce this bearish outlook.
Competitors such as Comcast, Fox Corporation, and Warner Bros. Discovery have already moved to divest or separate linear television assets, signaling that shrinking the media footprint has become the rational, shareholder-aligned path. Disney, by contrast, has remained the largest owner of cable networks just as the traditional bundle continues to unravel, contributing to its prolonged stock underperformance during much of Iger’s tenure.
Pressure is intensifying from technology platforms, particularly Google. YouTube and YouTube TV now possess significant negotiating leverage, demonstrated by their willingness to let Disney channels go dark and by their push toward genre-based “skinny bundles.” These shifts threaten Disney’s channel penetration, affiliate fees, and long-term relevance, while the loss of marquee events like the Academy Awards underscores the migration of prestige content away from traditional TV.
While Disney’s theme parks and film studios remain strong and cash-generative, these bright spots are unlikely to offset the structural decline of the television segment in 2026. Absent a decisive divestiture, Disney’s delayed restructuring leaves the stock facing continued headwinds and an unfavorable risk-reward profile.
Previously, we covered a bullish thesis on The Walt Disney Company (DIS) by Investing Intel in May 2025, which highlighted the company’s profitable streaming momentum, global theme park expansion, and upgraded guidance signaling potential for sustained stock appreciation. DIS’s stock price has been flat since our coverage due to strong earnings and investor optimism around Disney+ and Hulu profitability. Simeon McMillan shares a contrarian view but emphasizes the structural drag from linear television networks and the expected delay of a spin-off until after CEO Bob Iger’s 2026 retirement.
The Walt Disney Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 107 hedge fund portfolios held DIS at the end of the third quarter which was 111 in the previous quarter. While we acknowledge the risk and potential of DIS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DIS and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.