24/7 Wall St. Insights
- To help holders of its battered-down stock, Walt Disney Co. (NYSE: DIS) will need more than a brief success of its studio.
- The board should pick up the pace of choosing a replacement for CEO Bob Iger.
- Also: Dividend legends to hold forever.
To help holders of its battered-down stock, Walt Disney Co. (NYSE: DIS) will need more than a brief success of its studio. So far this year, it has ticked up by just under 4%, while the S&P 500 is 19% higher. A brief rally early in the year is well behind it. Shareholders might have been better off if raider Nelson Peltz had gotten the two board seats he tried to take in a proxy fight. At least his plans to reverse Disney’s fortunes might have worked. The board rebuffed him in April.
Disney’s “Inside Out 2” did extremely well at the box office, bringing in $652 million starting in June. Later in June, “Deadpool & Wolverine” had ticket sales of $632 million, making it the most successful R-rated movie in history.
Disney posted earnings in early August. Most were better than expected. However, management hinted that traffic to its theme parks might weaken because consumers might cut back their spending due to a choppy national economy.
For the most recent quarter, earnings rose 17% to $1.39 per share, and revenue rose just over 3% to $23.2 billion. After billions of losses, Disney’s streaming business made a small amount of money. However, the operating profit was only $47 million, as the Disney+ subscriber count hit 154 million. That profit could be short-lived. Disney+ is up against Netflix, Amazon’s streaming business, and half a dozen other media company streaming operations.
Investment bank Raymond James recently downgraded Disney’s stock from Outperform to Market Perform. One reason was concern about a slowdown in revenue at Disney theme parks. Its note to investors said, “Demand is moderating after a strong post-COVID surge, consumers are still digesting price increases taken in the past ~4 years, and a questionable consumer outlook further complicates the picture.”
Disney is considering who can replace CEO Bob Iger. Based on Iger’s performance, the board should pick up the pace.
Walt Disney Company (DIS) Price Prediction and Forecast 2025-2030
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