Shares of Walt Disney (DIS 1.32%) have buckled below $100 again. It's the first time in more than 10 months that the entertainment giant isn't trading in the triple digits. It's an odd stock chart for a company that has more good news than bad in that span of time, but the markdowns aren't entirely unjustified.
Disney is a provider of premium travel experiences worldwide, vulnerable when the global economy is coming under fire. Inflationary pressures are percolating, especially with the cost of the fuel required to get families going on road trips and on airplanes to get to its leading theme parks skyrocketing. With more money now going to fill up the tank -- as well as the unemployment rate creeping higher -- there will be less money to go around to hit up the multiplex, subscribe to premium streaming video services, and hop on a cruise ship.
Advertisers also tend to pare back when the economy is iffy. Why pay up for a lead when the target of that campaign is less likely to part with shrinking disposable income?
This may seem like a villainous turn for the company that's been crafting happy endings for the past 100 years, but it's always darkest before the dawn -- of a turnaround? I think the House of Mouse could be bottoming out here. In the words of its iconic Carousel of Progress attraction, it could be a great, big, beautiful tomorrow.
Image source: Disney.
Whistle while you work
Fiscal 2025 was respectable. Revenue rose a mere 3%, but adjusted earnings and free cash flow soared 18% and 19%, respectively. It topped Wall Street's profit targets for all four fiscal quarters.
Disney kicked off fiscal 2026 in the same fashion, with another beat in last month's financial update. It also confirmed that Disney is on track to deliver double-digit earnings growth in each of these next two fiscal years.
Disney is in a good place -- just about everywhere outside of its legacy linear networks business. Outside of one blockbuster movie from China, Disney released the only three films to top $1 billion in global box office receipts last year. Its theme park cash cow continued to deliver, even in Florida, despite the arrival of a competitor: the first new major gated attraction to open in the country in 24 years, Comcast-owned Universal Epic Universe. Disney's streaming business, which turned profitable in fiscal 2024, shifted into a higher gear in 2025.
Disney is rocking right now. Unfortunately, Disney stock is just getting rocked.
NYSE: DIS
Key Data Points
March to a new beat
This should have been a great month for Disney investors. The well-liked Josh D'Amaro takes over as Disney's new CEO at next week's annual shareholder meeting. A major upgrade is happening at its resort in France, with the rebranding of Walt Disney Studios Park as Disney Adventure World later this month, complete with new attractions and experiences.
There is even a lot happening sooner than both of those events. Pixar's Hoppers was the top draw at the multiplex over the weekend. It had the strongest opening for an original Disney animated feature since Coco in 2017. Who says theatrical distribution is dead?
And later this week -- tomorrow, actually -- the maiden voyage for the Disney Adventure cruise ship leaves out of Singapore. It will be the biggest ship in the media mogul's expanding fleet.
With Disney stock dipping into the double digits, you can buy a piece of the iconic content creator for just 15 times this fiscal year's earnings and less than 14 times next year's target. Disney doesn't often trade at a discount to the market, and it doesn't stay there for long when it does.
These are uncertain times. It's easy to see why military activity in the Middle East, domestic unrest, and inflationary fears could weigh on Disney. It may offer escapism at a time when many people need it, but it's a challenging time to get folks to pay a premium for the break from reality. It's still hard to deny the long-term appeal of Disney, a realization that becomes even more compelling amid the short-term pullback in the stock.
