Core Viewpoint - Disney shares have experienced an approximate 8.5% decline in November, primarily due to a mixed earnings report, leading to varied analyst opinions on whether to buy, sell, or hold the stock as 2026 approaches [1][2]. Group 1: Reasons to Buy or Hold Disney Stock - A Morningstar analysis suggests a fair market price of $120 for Disney stock, significantly higher than its current valuation of around $104 as of November 24 [3]. - The recent fiscal fourth-quarter report indicated a 0.5% year-over-year decline in revenue, mainly from linear entertainment networks and theatrical films, while parks, experiences, streaming, and sports showed positive results [4]. - A consensus among 16 analysts covering Disney stock indicates a strong "Buy" rating, with 14 recommending to buy, 2 suggesting to hold, and none advocating for a sell [4]. Group 2: Reasons to Consider Selling Disney Stock - Guggenheim analyst Michael Morris maintains a price target of $140 but notes that most profit potential for the next year is expected in the latter half [5]. - The growth in segment operating income for fiscal year 2026 is anticipated to be back-half weighted, influenced by cruise expenses, film release schedules, and sports rights payments, alongside concerns about consumer demand and the decline of linear networks [6]. - Despite potential challenges, several blockbuster intellectual properties are set to release in 2026, which could drive Disney's stock price to approximately $129.14, reflecting a 13-14% year-over-year gain [7].

Market Performance - US stocks gained over 8% in Q3, with calendar-year gains exceeding 14% as measured by the Russell 3000 Index [2] - Small-cap stocks outperformed with a rise of over 12%, while large caps gained roughly 8% and mid caps were up 5% [2] - The technology sector, driven by artificial intelligence, led the market with a 13% increase, followed closely by communication services at 12% [3][4] Sector Analysis - The consumer discretionary sector also contributed positively, rising nearly 9%, while consumer staples was the only sector to decline, falling by 2.6% [3][4] - The ongoing AI boom continues to significantly impact technology and communication services, driving much of the Russell 1000 Index's positive returns [4] Company Performance - Martin Marietta Materials and Sysco Corporation were top contributors in Q3, with Martin Marietta optimizing its product offerings and Sysco benefiting from internal initiatives [7][8] - General Motors saw improved clarity on tariffs and lower interest rates, which could enhance customer demand [9] - Labcorp experienced strong utilization in the healthcare sector, while ConocoPhillips benefited from synergies from its Marathon integration [9] Portfolio Activity - New positions were initiated in Walt Disney and Zoetis, with Disney's streaming and parks businesses expected to drive earnings growth despite challenges in sports and linear TV segments [15] - Zoetis, a leader in animal health, has a strong product portfolio and growth drivers, allowing for a position to be established below intrinsic value [16] Market Outlook - There is a growing divide in consumer spending, with higher-income individuals maintaining or increasing spending, while lower-income groups face job scarcity and inflation pressures [18] - The market's rebound has led to above-average valuation levels, making it challenging to expect returns matching historical averages over the next five years [19] - Sentiment around AI is driving equity market returns, but there are concerns that this optimism may be disconnected from reality [20][22]