Macroeconomic uncertainty, supply chain issues, and rampant inflation have weighed on the stock market in recent months, pushing the S&P 500 and the Nasdaq Composite into bear market territory. Disney (DIS -1.79%) hasn't been spared amid the carnage: Its stock is down by 49% from the peak it hit late last year.
Investors looking for reasons to buy Disney in the wake of that plunge need look no further than recent headlines, which show a number of promising, high-profile developments coming from every corner of its vast empire, including theme parks, cruise ships, streaming video, and even in the C-suite. These updates suggest that the House of Mouse is setting the stage for a remarkable turnaround when the markets begin to recover. Here are five recent developments that could help put the magic back in Disney stock -- and sooner than you might think.
1. A once-in-a-lifetime vacation offering sells out
Disney devotees are an enthusiastic bunch, and the company is always coming up with new ways to cater to its biggest fans. It recently unveiled the Disney Parks Around the World trip, a globe-trotting vacation extravaganza that pushed the upper limits on the price of fandom. The 24-day holiday adventure included jet-setting to six countries and 12 Disney theme parks. These included not only the company's flagship locations in Florida and California, but also parks in Tokyo, Shanghai, Hong Kong, and Paris, with additional stop-offs at the Pyramids of Giza in Cairo and the Taj Mahal in India.
Prices for this once-in-a-lifetime vacation package started at $110,000, but that didn't stop some of Disney's most ardent fans from snapping up tickets during the presale period. The 75 tickets sold out before they were even offered to the general public.
Given the success of that high-priced venture, Disney no doubt plans to offer similar trips in the future.
2. A Star Wars-themed cocktail that costs...
The maiden voyage of Disney's new cruise ship, Wish, is scheduled for later this month. The vessel includes a Star Wars-themed dining experience called the Hyperspace Lounge, based on an establishment featured in Solo: A Stars Wars Story. Disney describes the immersive experience as "an adult-exclusive, space-hopping tour to a galaxy far, far away."
One of the more notable offerings on the lounge's menu is a libation inspired by the Star Wars universe -- a cocktail dubbed the "Kaiburr Crystal." The drink arrives in a droid-inspired cooler, complete with smoke, sound effects, and flashing lights. In keeping with the theme of testing the upper limits of the price of fandom, the drink costs a cool $5,000.
For cruise ship passengers on a budget, the menu includes other, more affordably priced Star Wars-themed beverages.
3. Bob Chapek renews his contract
CEO Bob Chapek took the helm of the storied entertainment company just as the pandemic rocked many of its flagship businesses. Despite the shuttering of theme parks and movie theaters, Chapek helped position Disney to succeed. He leaned into its nascent streaming service, Disney+, which has released such hits as The Mandalorian, WandaVision, The Book of Boba Fett, and Obi-Wan Kenobi.
The effectiveness of his leadership led Disney's board of directors to vote unanimously to extend his contract for three additional years. While challenges remain, the theme park and movie businesses are rebounding, and Disney+ continues to impress. As of April 2 -- the end of Disney's 2022 fiscal second quarter -- the streaming service had nearly 138 million subscribers, keeping it on track to achieve management's audacious goal of 230 million to 260 million subscribers by 2024.
4. Cutting ties with a dubious past
Popular log flume ride Splash Mountain has been a staple at both Disneyland and Disney World for decades, but it's finally getting a much-needed makeover. The redesign will remove references to the controversial 1946 movie The Song of the South, which includes racist tropes and what Disney describes (when referring to other, less problematic old films available on Disney+) as "outdated cultural depictions." The upgrades will transform the ride into "Tiana's Bayou Adventure," featuring characters featured in the 2009 film The Princess and the Frog. The revamped attraction will debut in late 2024.
The update will take its inspiration from Mardi Gras, the City of New Orleans, and the bayous of Louisiana, according to SVP of Creative Development Carmen Smith, who called it a "love letter" to New Orleans.
It's an important move by Disney, and one that's been a long time coming.
5. The Hocus Pocus 2 trailer was a big hit
Long-time Disney fans are no doubt familiar with Hocus Pocus, a classic Halloween movie featuring the talents of Better Midler, Sarah Jessica Parker, and Kathy Najimy. The film, which debuted in 1993, has remained a perennial holiday favorite, and it's getting a long-awaited sequel. Just last week, Disney dropped the first teaser trailer for Hocus Pocus 2, which is set to debut on Disney+ in late September, and the viewer reaction highlighted the original's enduring popularity.
The sneak peek conjured 43.6 million views during its first 24 hours. To put those numbers in context, the Hocus Pocus 2 trailer outpaced the trailers for such wildly popular Disney+ originals as The Book of Boba Fett (23 million views), both seasons of The Mandalorian (35 million views each), and Luca (28 million).
This suggests that the winning streak enjoyed by Disney+ is set to continue.
Disney's track record for finding new and innovative ways to extract revenue from its intellectual property is unrivaled.
All of the developments discussed above come on the heels of the unquestionable success of Doctor Strange in the Multiverse Madness, which became the 10th movie from the Marvel Cinematic Universe to top $400 million in domestic ticket sales, and is currently the second-highest-grossing film of 2022.
Given the current situation, challenges remain for Disney, and its stock could fall further -- at least in the short term. That said, while none of these developments alone amounts to much, taken together they show that Disney still has plenty of catalysts to spur growth. That makes the stock an unqualified buy now, before Wall Street comes to its senses.