Disney vs. Comcast: Which Media Giant Has Better Upside Potential?

Core Insights - Disney and Comcast are major players in the entertainment and media sector, each with diverse business portfolios and significant market presence [1] - Both companies are navigating evolving consumer preferences and challenges in streaming profitability [1] Disney's Performance - Disney reported full-year revenues of $94.4 billion for fiscal 2025, with streaming operations achieving consistent profitability [2] - The Experiences segment generated a record operating income of $10 billion, an 8% year-over-year increase, with fourth-quarter operating income reaching $1.9 billion, up 13% [5] - Disney+ subscribers reached 132 million, with a notable addition of 3.8 million in the fourth quarter, while combined subscriptions for Disney+ and Hulu totaled 196 million [4] - Management projects 10% operating margins for Disney+ and Hulu in fiscal 2026, indicating strong pricing power and operational efficiency [4] - The company announced a significant expansion with a new theme park resort in Abu Dhabi, targeting a large addressable market [5] Comcast's Performance - Comcast reported third-quarter 2025 adjusted EPS of $1.12, matching the prior year and beating analyst expectations, with free cash flow increasing by 45% to $4.9 billion [9] - The company approved a major restructuring, separating cable networks into Versant Media Group, scheduled for completion on January 2, 2026 [11] - Comcast's Connectivity & Platforms segment, which accounts for approximately 68% of revenues, faces structural challenges but continues to generate substantial cash flow [10] - Peacock's paid subscribers increased by 24.2% year over year to 41 million, with revenues rising 18% to $1.2 billion [10] Valuation and Market Comparison - Disney trades at a forward P/E of 16.72x, reflecting investor confidence in its streaming turnaround and growth prospects, while Comcast trades at a lower multiple of 7.22x [13] - Over the past six months, Disney shares have decreased by 8.4%, while Comcast shares have fallen by 16.9% [16] Investment Outlook - Disney is positioned as a compelling investment choice due to its successful streaming transformation and strong financial guidance, including double-digit adjusted EPS growth projections for fiscal 2026 and 2027 [17] - Investors are encouraged to monitor Disney stock for entry opportunities, while Comcast's performance is under observation for stabilization signals post-restructuring [17]