Disney stock is down 57% due to theme park struggles, subscriber growth concerns

From Nasdaq: 2024-08-13 01:26:03

Disney stock (DIS) is currently trading at $86 per share, down 57% from its pre-inflation high of $200 in March 2021. Factors contributing to the sell-off include slowing subscriber growth in streaming, weak performance in linear TV, and mixed outlook for theme parks. Disney’s stock recovery potential hinges on boosting profitability for streaming and theatrical business success.

The Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, has consistently outperformed the S&P 500 in recent years. Disney’s stock performance has lagged behind the market, with returns of -15% in 2021, -44% in 2022, and 4% in 2023. With Disney’s valuation estimated at $137 per share, the stock may be undervalued but faces challenges in the current macroeconomic environment.

Disney’s revenues have increased from around $65 billion in 2020 to approximately $89 billion over the last 12 months. Despite posting a net loss of $2.9 billion in 2020 due to pandemic-related disruptions, Disney rebounded with a net income of $2.35 billion by FY’23. The company’s theme park and streaming segments have been key revenue drivers.

During the 2007-2008 financial crisis, Disney stock declined from nearly $29 to $17 before rebounding to over $32 by early 2010. The S&P 500 fell 51% during the crisis but recovered 48% post-bottoming out. With the Fed’s efforts to control inflation benefiting market sentiment, Disney stock has the potential for gains once recession fears lessen.



Read more at Nasdaq: Why A Theme Park Lull Complicates Disney Stock’s Recovery