I hear what you are saying and your point is clear. Where we disagree is the dramatic impact of reducing share buybacks. First, they will not buy back as many shares as last year even in 2015. This is from the Year End Earnings Call at 9/30:
They are already planning on cutting back stock buybacks to more normal levels. We may get an update tomorrow on the Q1 call.
I also think that the impact of share buybacks on EPS is not as much as you think. During the 5 years from 2010 to 2014 TWDC's net income increased from $3.963B to $7.501B. This is roughly an 18% annualized increase in earnings. During that same time Diluted EPS increased from 2.03 to 4.26 or roughly a 22% annualized increase. If no shares were sold or repurchased during this period then EPS growth would have dropped from 22% to 18% per year. The point is that the bulk of the EPS growth is driven by actual increases in net income not stock buybacks. For anyone playing along at home these numbers are all on page 25 of the 2014 10K
I can't say for sure how much the stock price would drop if they just stopped buying shares back, but I don't think it would be as dramatic as you think.
If actual earnings suffer that's a different story. A major economic downturn impacting the parks or some big movie flops could hurt the stock price a lot. For the next 3 years before the weatherman moves on the company is planning to release 21 tentpole movies as opposed to the 13 they had the previous 3 years and those include some very likely hits like 3 Star Wars movies, multiple Marvel releases (Avaengers, Guardians 2, others) and some likely successful Pixar projects including sequels Finding Dory and Toy Story 4. All signs point towards a pretty nice 3 year run for Iger and Co. They could not buy a single share back over the next 3 years and if the economy stays good and the hit movies come through the stock won't miss a beat.
To your point on the Street punishing the company on reinvestment, I'm not sure thats totally true either. They do like the stock buybacks and increasing dividend, but the reaction to the DCA 2.0 project was pretty positive from analysts and nobody seems interested in questioning the magic band boondoggle. I would say as long as the earnings is solid and the hits keep coming analysts are not opposed to seeing theme park reinvestment.