We are tired of Disney. “This is a hated stock,” Jim Cramer said Thursday at the club’s November monthly meeting. “Sometimes you have to go. And I don’t want to fight Disney anymore.” Jim’s comments came as Disney shares fell nearly 8% following mixed quarterly results with little else to hang onto, including the streaming failure. According to LSEG, the company’s fiscal 2025 fourth-quarter sales were essentially unchanged year-over-year at $22.46 billion, below expectations of $22.75 billion. Adjusted earnings per share for the three months ended Sept. 27 totaled $1.11, beating the LSEG consensus of $1.05. However, on an annual basis, adjusted EPS decreased 3%. DIS 5Y Mountain Disney YTD Disney trading is limited on Thursday, but I don’t want it to go this low anyway. The quarterly results may not have been that great, but a drop this much seems like an overreaction. In the coming sessions, we plan to sell on a rebound. As a result, we downgrade the stock to ‘3’ and lower the target price from $135 to $115 per share. “I’m glad I sold some yesterday,” Jim said of Wednesday’s 150-share sale, leaving him with a 750-share position and a portfolio weight of 2.2%. In conclusion, this was not a great quarter. And we believe the time has come to withdraw from Disney, which we have been fighting against for many years. Disney certainly has an impressive portfolio of assets. But the stock has become something of a value trap, and hasn’t done much over the past decade. It takes away too much mindshare. “It’s borrowing my brain and I want to get rid of it. It’s got too much baggage,” Jim said. “I want a better place to buy stocks.” Explanation Direct-to-consumer deals are a focus for investors in Disney’s largest entertainment division. While Disney+ and Hulu’s quarterly streaming subscriber numbers both exceeded expectations, DTC revenue and operating income results were weaker as Disney+’s average monthly revenue per user (ARPU) result was only slightly above expectations and was not enough to offset lower-than-expected ARPU for Hulu’s live TV + SVOD service. DTC operating income was strong, increasing 39% year-on-year. Disney+ added 3.8 million subscribers during the quarter, ending the quarter with 131.6 million total subscribers, which was higher than expectations of 129.9 million, according to FactSet. Disney+ and Hulu ended the quarter with 195.7 million subscribers. This was an increase of 12.4 million cases, exceeding expectations of 193.7 million cases. These online streaming additions come despite the backlash over the suspension of “Jimmy Kimmel Live!” The show went off the air on September 17 and resumed six days later. Disney’s linear networks (including ABC, Freeform, FX, and the eponymous Disney Channel) remain under pressure, with quarterly revenue down 16% year-over-year. The linear network division’s operating profit fell 21%, but managed to beat expectations. Disney’s sports division, centered on ESPN, was doing well. Quarterly sales and operating income exceeded expectations. The standalone flagship ESPN streaming service, which launched in late August, is still in its early stages. But on the post-earnings call, management sounded enthusiastic about the reception. The team noted that while viewers are attracted to all the extra features that come with apps, advertisers are seeing real value in the increased data they can collect from app interactions compared to linear cable. The company said it is increasing business with existing advertising partners and attracting new ones. Disney CEO Bob Iger said about 80% of users who signed up for the new ESPN app signed up for the “trio bundle,” which bundles Disney+ and Hulu with the new ESPN streaming subscription. Live sports viewership across ESPN networks (including ESPN on ABC) increased 25% year over year. Disney’s Experiences division, which includes parks and cruises, had lower-than-expected sales, but still posted a record fourth-quarter operating profit. During the quarter, consumers became more pessimistic about the economy due to the government shutdown. The longest shutdown in history ended Wednesday night. The company plans to launch two new cruise ships, bringing the total size of its fleet to eight. Disney’s Destiny will make its maiden voyage on November 20th. Disney Adventure, set to set sail in March 2026, will be the company’s first cruise ship to homeport in Asia. On the park side, Disneyland Paris’ World of Frozen will open this spring. Looking further ahead, management highlighted expansion efforts across all of the company’s theme parks, adding that five more cruise ships are scheduled to enter service from fiscal 2026 onwards, and a new theme park is planned for Abu Dhabi. Guidance Looking forward, management provided detailed guidance for fiscal year 2026 and reaffirmed its outlook for double-digit adjusted EPS growth in fiscal year 2027. The team projected double-digit earnings per share growth for fiscal year 2026, which appears to be in line with expectations, and operating cash flow was higher than expected at $19 billion. The company’s full-year capital investment forecast of $9 billion also exceeded expectations. Nevertheless, this is an implied free cash flow measure of $10 billion, slightly higher than the expected $9.44 billion. Management also plans to double its stock repurchase activity, repurchasing $7 billion worth of stock in fiscal 2026. In addition to increasing share buybacks, the team increased its dividend by 50% to $1.50 per share. By segment, management expects entertainment to achieve double-digit year-over-year segment operating income growth, weighted in the second half of fiscal 2026. Segment operating income growth in the sports segment will be in the low single digits, with “growth weighted to the fourth quarter, reflecting the timing of rights costs.” The Experience segment’s year-over-year operating profit growth rate was in the low single digits, which also accounts for the second half of the year. (Jim Cramer’s Charitable Trust is a long DIS. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. 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