Investing

Disney Shares Crushed by S&P 500

Douglas A. McIntyre

Published: April 4, 2024 6:35 am

Walt Disney Co. (NYSE: DIS) may have won its proxy fight against raider Nelson Peltz. However, its shares are down 13% over the past two years, while the S&P 500 has been up 15%. Without the chance that Peltz would change the company’s shaky plans, the stock has little downside support. A tough quarter could quickly push it lower.

Disney’s most obvious and often talked about problem is that its board has not identified someone, at least publicly, to take CEO Bob Iger’s job. He is in his second run as chief executive. This time, it has been less successful. The board needs to put someone in place, perhaps as chief operating officer, to show it has a plan for managing the company into the next decade. (Disney Stock Price Prediction in 2030: Bull, Base, & Bear Forecasts)

Disney has several other challenges that worry many investors. The first is its streaming business, which has lost billions of dollars since Iger launched it in 2019. Disney+ has over 150 million subscribers, but it also has at least half a dozen powerful competitors. The industry is dominated by leaders Netflix and Amazon Prime Video. With its massive pile of cash, Apple can outlast everyone in the industry with Apple TV+. Warner Bros. Discovery has a service, and Paramount does as well. Alphabet’s YouTube Premium subscription base is growing fast.

Disney has several traditional media operations, including ABC. Legacy media advertising has been under siege for several years, and management cannot reverse an industrywide trend.

And Disney no longer rules the box office with its Marvel and Pixar franchises. Lately, traditional theater ticket sales have been weaker than in most years over the past decade.

Disney has no catalyst to get its share price back online.

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