The Walt Disney Company’s stock price continues to drop. The stock price closed at $85.76 on December 19, 2022, which is near a 2-year low for Disney. The stock price is quickly approaching the 5-year low of $79.07 that was hit on March 16, 2020 when Disney closed its parks.
The DIS stock fell by over 4% after the box office results from Avatar: The Way of Water fell below expectations. Missed expectations aside, the movie will still command a large total box office number propelled by strong international numbers.
For the year, Disney stock is now down over 40%. It’s well removed from its 52-week high of $160. Investors do not seem confident in Disney’s streaming plans, or in the weakening sentiment surrounding Disney’s theme parks. It’s no secret guests are becoming more and more frustrated with the Disney parks experience.
It’s worth noting that a lot of stocks have dropped significantly over the past several months. However, Disney’s stock has dropped more than twice as much as the S&P 500 index over the past year. SPY, a fund that tracks the S&P 500, is down 19.3% this year compared to the 41.8% drop by Disney. The performance of the S&P 500 is a good measuring stick to compare a stock to, and Disney is coming up well short.
The stock price has continued to drop after Bob Iger took over the role of Disney CEO from Bob Chapek. Chapek was removed from the position in November after losing board confidence and announcing massive losses in Disney’s content creation division. The operating losses came out to nearly $1.5 billion, which raised plenty of red flags and continued the stock price’s tumble.
What about Disney’s dividend? The company stopped paying dividends to shareholders in 2020 in an effort to conserve money as its businesses closed. At-the-time CEO Bob Chapek said in 2021 that the dividend would return “in the distant future.” Iger hasn’t commented on the dividend at this time.
Iger’s plans to restructure Disney’s media divisions has yet to play out. It’s also unclear what he plans to do with Disney’s parks and growing guest complaints. Time will tell if this was a great opportunity to get in at Disney’s floor, or if the worst is yet to come.
