Media

Disney Is DJIA's Worst Performing Stock, Down More Than 9%

Thinkstock

This year has not been kind to Walt Disney Co. (NYSE: DIS). The Mouse House’s stock price has dropped 9.39% as of Friday’s closing bell and is one of just five Dow Jones Industrial Average stocks to post a share price decline for the year to date.

Despite investors’ coolness to the stock, analysts have been mostly upbeat, pointing out the company’s strong asset base. Merrill Lynch, for example, is positively buoyant:

We believe Disney shares will outperform peers given their exposure to accelerating Parks & Resorts fundamentals, a surge in free cash flow (aided by the end of a major investment cycle), an increasingly positive Studio outlook, steady growth at Media Networks and improving profitability at Interactive.

Last quarter’s media segment revenues, which includes ESPN, were flat and the company has been bleeding subscribers to the sports network. According to a report from Sports Illustrated, between 2013 and 2015, Disney has lost about 7 million subscribers and about $1.3 billion in revenues.

Disney moved to stop the bleeding by investing $1 billion in video streaming company BAMTech, along with acquiring the right to purchase all the company. An analyst at Hilliard Lyons said that the company’s strategic plan includes “streaming of complementary ESPN-branded content, and potentially other content from Disney’s many brands and businesses.”

That may happen, but it will take time and more investment. Until then, investors are having no trouble resisting Disney’s 1.48% dividend yield, the third-lowest among the 30 Dow stocks.

Shares closed at $95.21 on Friday, down nearly 0.4% on the day in a 52-week range of $86.45 to $120.65. The consensus 12-month price target on the stock is $109.52.

Take Charge of Your Retirement In Just A Few Minutes (Sponsor)

Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.

Here’s how it works:

  1. Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
  2. Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
  3. Choose Your  Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.

Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.