What happened
Walt Disney (DIS -0.45%) stock had a roller-coaster ride in 2021, according to data from S&P Global Market Intelligence. The stock trended downward, punctuated by a thrilling jump in February and a scary drop in November. When the dust settled, Disney's shares had lost 14.5% in 52 weeks. Here's how it all went down.
So what
The House of Mouse limped into 2021, battling coronavirus effects at every turn in 2020. The company had recently reorganized its operating structure in order to funnel more resources into its streaming video business. Most of Disney's theme parks were still closed down, waiting for the go-ahead from local governments to reopen their turnstiles. The cruise line remained anchored at port. COVID-19 vaccines were not yet widely available.
But it wasn't all doom and gloom. Movie theaters were back in business, albeit with limited capacity and minimal foot traffic. The focus on streaming media was paying dividends as Disney+ closed 2020 with 94.9 million subscribers, supported by a total of 51.5 million paid accounts for ESPN+ and Hulu. Coronavirus vaccines became available to the public in November 2021, indicating a gradual return to normal life -- possibly opening the door to fill the pent-up demand for entertainment activities such as cruises and theme park visits.
February's 14% stock surge was powered by several steps forward in the fight against COVID-19. Disney's shares rose as vaccine distribution skyrocketed and as the Biden administration talked about another round of stimulus checks for consumers. Disney looked good in February's wintry light.
But the joy didn't last. The pandemic refused to go away as new variants and disappointing vaccination rates powered new infection spikes. In November, the delta variant weighed heavy on Disney's fourth-quarter earnings report and then the omicron strain turned up near the end of the month, changing people's travel and entertainment plans again. The stock fell 14.3% that month alone.
Image source: Getty Images.
Now what
As we ease into 2022, the omicron coronavirus variant continues to challenge Disney's theme park and cruise operations. Disney+ and its streaming-service cousins carry a massive load nowadays, and share prices are likely to rise or fall based on how well these services perform in February's first-quarter update.
It's hard to determine where Disney and its stock may go for the rest of 2022, given the enormous uncertainty that comes with this sustained pandemic. However, it's fair to say that the company has adapted to the new business environment in useful ways. And Disney's brand power is a unique advantage that should keep the company relevant and fiscally healthy for many years to come, even in a rapidly changing market. Disney has been an entertainment powerhouse for decades, and this health crisis won't change that.
I certainly have no intention of selling my own Disney shares anytime soon, and the stock actually looks like a smart buy as it trades 22% below 52-week highs.
