24/7 Wall St. Insights
- Walt Disney Co. (NYSE: DIS) remains one of the great stock market wrecks in recent corporate history.
- No one has been able to turn the company around, and no one is likely to do so soon.
- Also: Dividend legends to hold forever.
The New York Times recently ran an article about how Bob Iger replaced the man who succeeded him as chief executive officer. It was a waste of ink. Walt Disney Co. (NYSE: DIS) remains one of the great stock market wrecks in recent public corporation history, and management changes have not helped what have become desperate investors. The stock is down 37% in the past five years, while the S&P 500 is 105% higher. It is down 23% in the past two years, while the S&P 500 is 38% higher. It is up 7% in the past year, but the S&P 500 has gained 22%.
Most of Disney’s problems remain. Management can point to a tiny profit in its streaming business after billions of dollars in losses since Iger launched it in late 2019. It is still well behind Amazon and Netflix in revenue, and its miniscule margins are not secure.
Disney’s theme parks continued to be the heartbeat of the company. After releasing the last financial figures, management hinted the results were soft. This may be because Disney has started to price itself out of the theme park business. An economic slowdown will tell if that is true.
Disney recently had a huge hit at the box office with “Deadpool & Wolverine,” which has sold more tickets than any R-rated movie in history. It will take more than that to offset a string of mediocre releases. Results from its sports business, led by ESPN, remain stagnant.
Disney’s most recent earnings are not expected to be bested when new results are released. Revenue rose only 1% to $22.1 billion. Disney had a net loss of $0.01 per share, compared to a gain of $0.69 in the year-ago period.
Disney has been beaten down. No one has been able to turn it around, and no one is likely to do so soon.
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