Investors who have owned stocks in the past year have generally experienced some decent gains. In fact, the SPDR S&P 500 (NYSE:SPY) total return over the past 12 months is 17.2%. But there is no question some big-name stocks performed better than others along the way.
Disney’s Bumpy Ride: One company that has been a disappointing investment in the past year has been Walt Disney Co (NYSE:DIS).
Disney’s theme parks, cruise lines and TV and movie studio businesses experienced a near worst-case scenario when the COVID-19 pandemic occurred in early 2020. Vacation travel completely ceased, and Disney was forced to close its parks and suspend its cruises. Unfortunately, the current batch of COVID-19 vaccines has been ineffective in preventing the spread of omicron and other variants, and Disney's pandemic recovery may take longer than investors had initially hoped.
Fortunately for Disney investors, the pandemic coincided almost perfectly with the launch of the Disney+ streaming platform. Customers stuck at home with nothing to do but watch TV subscribed to Disney+ in droves in 2020, and the platform now has more than 118 million subscribers a little more than two years after its November 2019 launch. In November 2021, Disney reported a total of 179 million streaming subscriptions, which includes its Disney+, Hulu and ESPN+ services.
At the beginning of 2020, Disney shares were trading at around $146. By the beginning of March, the stock had dropped to around $119 after news of the virus spreading in China prompted concerns about a U.S. pandemic. On March 16, Disney closed all its theme parks around the world. The stock ultimately bottomed at $79.07 just two days later.
By the time Walt Disney Word reopened at 25% capacity in July, Disney shares were back up to around $113.
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Disney In 2022, Beyond: Disney shares hit new all-time highs above $160 in December 2020 and ultimately peaked at $203.02 in March 2021 ahead of the planned reopening of Disneyland in California on April 31.
Unfortunately, the post-pandemic rally has since fizzled, and the stock traded all the way back down to $129.26 in January 2022 after subscriber growth slowed to just 2.1 million subs in the fiscal fourth quarter. The stock has since rebounded to $142.19, but it remains in its longer-term downtrend and is trading below its 50-day and 200-day simple moving averages.
Disney investors who bought one year ago and held on have generated a disappointing return on their investment. In fact, $1,000 in Disney stock bought on February 2, 2021, would be worth about $784 today, assuming reinvested dividends.
Looking ahead, analysts are expecting Disney's stock to bounce back in the next 12 months. The average price target among the 25 analysts covering the stock is $196, suggesting 37.7% upside from current levels.
