It's a long journey as connections between Spain and Portugal are notoriously bad (until the high-speed line opens in a few years).

Have a look at https://www.seat61.com/trains-and-routes/madrid-to-lisbon-by-train.htm

Trains are probably not on sale yet for July.

For Lisbon to Valencia, the quickest route (other than flying) is to retrace your steps to Madrid (times in the link that @thibcabe gives), and that gives you just enough time to get the 2100 AVE to Valencia. 

It’s a long day, but doable.

Alternatively, you could get to Sevilla (by bus either from Lisbon, or from the south of Portugal) and spend the night - it’s a lovely city. There are direct trains from Sevilla to Valencia

Thanks for the recommendations I think we’ll take a bus from Lisbon to Sevilla.