Disney's Insider Confidence and Institutional Buying Signal Undervaluation and Growth Potential

The Walt Disney Company (DIS) has faced a mixed performance in 2025, with its stock gaining just 2.6% year-to-date, lagging behind broader market indices and sector peers according to financial reports. Yet, recent insider and institutional activity suggests a growing alignment of confidence in the company's long-term prospects. James Gorman, a Disney director and CEO of Morgan Stanley, has significantly increased his stake in the company, while a wave of institutional investors has bolstered their holdings. These developments, coupled with bullish analyst forecasts, present a compelling case for Disney as a strategic buy in 2026.

Insider Confidence: James Gorman's 90% Stake Increase

James Gorman's recent purchase of 18,000 shares of Disney stock for $2.01 million on December 12, 2025, marked a 90% increase in his holdings, bringing his total stake to over 44,500 shares. This move, executed at an average price of $111.89 per share, underscores Gorman's conviction in Disney's strategic direction despite the stock's underperformance in 2025. As a board member and a seasoned financial leader, Gorman's decision to lock in value at this price point signals a belief that Disney's shares are undervalued relative to its long-term potential.

Gorman's purchase aligns with broader institutional trends. For instance, Mane Global Capital Management increased its stake by 79.2% in Q2 2025, acquiring 142,667 shares to hold 322,780 shares valued at $40.03 million. Similarly, Cwm LLC added 10,221 shares in Q3, raising its position to 180,911 shares worth $20.7 million. These moves reflect a shared view that Disney's challenges-such as its ongoing dispute with YouTube TV-are temporary and that the company's fundamentals remain robust.

Institutional Buying: A Vote of Confidence

Institutional investors have been net buyers of Disney stock in late 2025, with several firms significantly increasing their stakes. Brighton Jones LLC raised its holdings by 7.7% in Q4, acquiring 26,767 shares valued at $2.98 million. Meanwhile, DiNuzzo Private Wealth Inc. boosted its position by 82.5% in Q2, and JPMorgan Chase & Co. added 12.3 million shares in Q3, reflecting a 22.3% increase.

Notably, Disney's management has taken steps to reinforce shareholder value. In response to the YouTube TV dispute-which costs the company an estimated $30 million weekly-executives doubled the share repurchase program to $7 billion and announced a $1.50 dividend. These actions demonstrate a commitment to returning capital to investors, even amid short-term headwinds.

Analysts Remain Bullish on Disney's Long-Term Outlook

Despite the stock's muted performance, analysts remain overwhelmingly optimistic. A median price target of $140 implies over 25% upside from current levels, with 20 out of 29 analysts rating Disney as a "Strong Buy". This optimism is rooted in Disney's diversified business model, including its strong position in streaming, theme parks, and advertising. Institutional buying activity further validates this view, with 65.71% of Disney's shares held by institutions.

Strategic Implications for 2026

The alignment between insider purchases, institutional buying, and analyst forecasts suggests that Disney's stock is undervalued. Gorman's 90% stake increase and the influx of institutional capital indicate that market participants view the company's challenges as short-term and its growth potential as substantial. With a robust balance sheet, a diversified revenue stream, and a clear strategy to navigate industry disruptions, Disney is well-positioned to deliver value in 2026.

Investors should consider Disney not just as a bet on its entertainment empire but as a strategic play on the broader recovery of the media and leisure sectors. As the company executes its long-term vision, the current discount to intrinsic value offers an attractive entry point for those aligned with its trajectory.