Walt Disney stock has been one of the worst performers in the Dow Jones Industrial Average this year.
While the company’s grand streaming ambitions hit some snag, a slew of new content could propel shares in 2022.
first episode of Boba Fett. book of, a live-action Star Wars series on Disney+ starring Temuera Morrison, ended Wednesday. The show follows the titular bounty hunter who makes his way across the galaxy. Investors expect growth from such original content to impact Disney’s streaming services in the coming years.
Disney stock (ticker: DIS) was mostly flat on Wednesday, in line with the broader market. Shares are down 14% year-over-year, compared to the S&P 500 index’s 27% gain. It’s also the Dow’s biggest loser of the year, according to a note from Bespoke Investment Group, but whether it’s a positive or negative sign for 2022 depends on your sample.
According to Bespoke Investment Group, next year’s turnaround is a 12% gain for the Dow’s biggest loser over the past 25 years, compared to a 6.7% gain for the Dow’s biggest winner in the following year. The Biggest Loser has seen positive returns 58% times over a 25-year period.
Bespoke said in a note, “While 25 years of performance shows that the Dow’s biggest losers nearly doubled the performance of the biggest winners next year, it is important to point out that the trend has recently reversed.” Has been.”
Starting in 2016, the best performers in the Dow have an average of 42% gains over the next year. The biggest loss in the past eight years only tripled in the next year.
In November, the company reported lower-than-expected subscriber growth, leading to a drop in shares. Still, the company maintained its fiscal 2024 target of increasing to 260 million subscribers on Disney+ from 118 million in September. The stock’s bulls drew comparisons to a short-term gloom for Netflix (NFLX), which has bounced back from a temporary slowdown in growth in the past.
If you’re more concerned about projections than historical trends: 21 out of 30 analysts listed by FactSet have a Buy or equivalent rating on Disney stock. The average price target of $193.29 represents a 24% increase from recent levels.
KeyBanc Capital Markets analyst Brandon Nispel, who has an overweight rating and a $216 price target on the stock, wrote earlier this month that the stock is undervalued.
“We believe DIS’s position in streaming can fuel many years of rapid growth, and profitability should improve as the theme park and movie businesses recover post-COVID-19,” he wrote. they wrote. “In our view, this growth should do more than just ease the pressure on legacy media networks, and position DIS as a leader in an evolving media landscape.”
Boba Fett. book of, if well received by fans and critics, could help drive that growth. If not, there’s a lot more material on the way in the years to come, including a highly anticipated Obi-Wan Kenobic Show starring Ewan McGregor.
Write to Connor Smith at [email protected]