We’re fed up with Disney . “It’s a hated stock,” Jim Cramer said Thursday during the November Monthly Meeting for Club members. “Sometimes, you gotta go. And, I don’t want to fight Disney anymore.” Jim’s comments came as Disney stock sank nearly 8% following mixed quarterly results, with a streaming miss and little else to hang our hats on. Revenue in the company’s fiscal 2025 fourth quarter was largely unchanged year over year at $22.46 billion, missing expectations of $22.75 billion, according to LSEG. Adjusted earnings per share in the three months ended Sept. 27 totaled $1.11, outpacing the LSEG consensus of $1.05. On an annual basis, however, adjusted EPS fell 3%. DIS 5Y mountain Disney YTD While restricted from trading Disney on Thursday, we would not want to exit down this much anyway. The quarterly results may not have been great, but down this much seems like an overreaction. In the coming sessions, we will be looking to sell into a rebound. As a result, we’re downgrading the stock to our 3 rating and cutting our price target to $115 per share from $135. “I was glad we sold some yesterday,” Jim said, referring to Wednesday’s 150-share trim that left us with a 750-share position and a 2.2% portfolio weighting. Bottom line This wasn’t a great quarter. And, we think it’s time to move on from Disney, which we have battled for years. Disney does have a great portfolio of assets. However, the stock has become something of a value trap that hasn’t done much over the past decade. It’s taking up too much mindshare. “This thing is renting my brain, and I want to evict it. It has too much baggage,” Jim said. “I want the spot for a better stock.” Commentary In the Entertainment segment, which is Disney’s biggest, direct-to-consumer is the focus for investors. While quarterly streaming subscriber counts for both Disney+ and Hulu both outpaced expectations, DTC revenue and operating profit results came up short, as slightly better than expected average monthly revenue per user (ARPU) results in Disney+ were not enough to offset weaker than expected ARPU for Hulu’s Live TV + SVOD offering. DTC’s operating profit was up a solid 39% year over year. Disney+ added 3.8 million subscribers in the quarter, exiting with 131.6 million total subscribers, which was ahead of the 129.9 million expected, according to FactSet. Disney+ and Hulu exited the quarter with 195.7 million subscriptions — an increase of 12.4 million, and ahead of the 193.7 million expected. These net-streaming additions came despite the backlash over what turned out to be the temporary cancellation of “Jimmy Kimmel Live!” The show was taken off the air on Sept. 17 and returned six days later. Disney’s linear networks — including the likes of ABC, Freeform, FX and its namesake Disney Channel — remain under pressure, with quarterly revenue falling 16% year over year. Operating income in the linear networks division fell 21% but managed to outpace expectations. Disney’s Sports segment,…
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