Key Points
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Disney stock sells at about the same level as it did 10 years ago.
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The parks division is the only part of Disney reporting growth in its operating income.
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Spinning off the parks business probably isn’t the solution.
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In the world of megacap stocks, Walt Disney (NYSE: DIS) is among the more disappointing performers. During the past 10 years, its stock has been little changed. The huge changes in the entertainment industry amid the pandemic and home media technology have weighed on the stock, as has turmoil within its top management.
Given these factors, one might wonder how to improve the stock. Amid Comcast‘s spinoff of NBCUniversal, some analysts have considered Disney separating its parks business, but would such a move help boost Disney’s stock? Let’s take a closer look.
Comcast and Disney, compared
Comcast originally bought NBCUniversal in 2011 to capitalize on both the service and its content. This included media outlets such as NBC and Telemundo, as well as the Universal theme parks.
However, Comcast did not achieve the synergies it had hoped for because being a content provider is fundamentally different from providing infrastructure and services. Consequently, it has decided to unwind the merger through a spinoff.
Nonetheless, investors should know that this is not an apples-to-apples comparison when evaluating Disney, primarily because it does not provide telecom services as Comcast does. Thus, the difference is that content and theme parks are the majority of Disney’s business.
Separating businesses
Moreover, it does not take a deep look at the company to understand the synergies between Disney’s content businesses and Disney Experiences, which operates the theme parks and cruise lines.
In fact, the company’s founder, Walt Disney, understood how a theme park might complement Disney’s brand. This prompted him to open Disneyland in California in 1955 and lay the groundwork for Disney World in Florida before he passed away in 1966.
This is a different path from NBC and Universal, which merged in 2004. Additionally, all indications are that NBC and Universal will remain one after the Comcast spinoff.
Furthermore, even if Disney spins off Disney Experiences, it might actually cause investors to sell Disney and invest in the parks company. Indeed, Disney Experiences has had to contend with backlash over high ticket prices, and inclement weather that can sometimes reduce attendance.
Nonetheless, most of the company’s major challenges stem from Disney Entertainment and ESPN, as cord-cutting and intense competition in the streaming business have affected its revenue growth.
On the content side, poor box-office performance and a lack of ability to develop compelling new content have weighed on the company. Although Toy Story 5 performed well, the company cannot depend on one movie or established franchise to reignite Disney.
Moreover, the financials confirm the company’s struggles. In the first half of fiscal 2026 (ended March 28), revenue rose 6% year over year to $51 billion. Interestingly, Disney Entertainment’s revenue increased by 8%, slightly above Disney Experiences at 6%.
However, Disney Experiences accounted for $5.9 billion of the company’s $9.2 billion in operating income. Also, it was the only segment to report an increase in operating income, providing a compelling incentive for Disney to keep its parks division rather than spin it off.
Would separating the parks business help Disney stock?
Given the company’s challenges and financial results, separating the parks business is more likely to hurt Disney stock than help it.
With Comcast spinning off NBCUniversal, it will have little resemblance to Disney, becoming a pure-play telecom services provider once again. Instead, Disney will more closely resemble NBCUniversal, a content and theme parks business with no obvious plans to separate its parks.
Such a move does not appear to make sense for Disney either. Although Disney Experiences has had its struggles, it is the business segment least affected by the company’s longer-term issues with cord-cutting, streaming competition, and content development. Additionally, Disney Experiences is the only part of the company posting operating income growth in the current fiscal year.
Thus, rather than dragging down Disney stock, Disney Experiences may be the strongest reason to continue holding the company’s shares.
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Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.
