Title: Navigating Disney's Stock Journey in 2024: Rise, Fall, and Regain
In the grand stage of 2024, Walt Disney (DIS) has put on a three-act spectacle for its stakeholders. Although the shares started soaring, a slump followed, only to bounce back with an impressive recovery towards the end of the year. Let's delve into the narrative - the highs, the lows, and the triumphant comeback.
Act One: The Rise Up - 37%
The curtain rose on 2024 with Disney shares striding vigorously, fueled by two activist groups eager to make their mark. As the annual shareholder meeting approached, Disney ensured the good vibes never subsided. By late March, the shares had rocketed 37% year-to-date, setting a promising tone for what was to follow.
Disney displayed an impressive repertoire to lure shareholders heading into the proxy battle. In its opening act, it boasted:
- A updated goal to exceed its previously raised $7.5 billion cost savings target by the end of fiscal 2024.
- A $1.5 billion investment in Epic Games, its entrance into the popular Fortnite gaming world, and plans to develop games and entertainment for young users in the platform.
- A doubled semi-annual dividend and green-lit $3 billion share repurchase program, marking an end to its buying hiatus after six years.
- Exclusive Disney+ streaming rights for Taylor Swift's concert film and a theatrical release for the animated Moana series.
The rising shares and positive strides firmed the supporters' backing before the proxy battle commenced. After a couple of sluggish seasons, Disney was once again outpacing the market in 2024.
Act Two: The Fall Down - 32%
Once the dust settled after the shareholder meeting, an unexpected plot twist unfolded. With the quiver left bare in the post-battle period, Disney shares slumped by 32%, dropping from their March 28 peak to an Aug. 8 low. The stock that once was the Dow's leading gainer started tumbling, causing unease in the investment community.
Questions arose regarding the succession strategy for CEO Bob Iger. With his tenure ending in two years, a past mishandled handoff created a tense atmosphere. Moreover, the market disliked the financial results reported in May, with lower-than-anticipated revenue and a warning about a challenging fiscal third quarter. Disney's theme parks segment, which had been performing well during the pandemic recovery, began to deteriorate.
Act Three: The Rise Up - 39%
Disney’s third act was filled with resurgence, starting just two days after the summer trough with an ambitious theme park and cruise line expansion announcement at a fan event in Anaheim. Here is what followed:
- Disney's boardroom announced its fourth chair in three years and promised to reveal Iger's successor by early 2026.
- Concerns about Disney’s studio's theatrical prowess following a rocky 2023 were virtually quashed. The studio scored two of the top-grossing films worldwide in 2024 with "Inside Out 2" and "Deadpool & Wolverine." "Moana 2" was expected to round off the top three at the box office.
- Disney+ attained profitability, a sharp contrast to other media networks that were grappling with streaming losses.
- Disney reported earnings figures exceeding analyst expectations for the subsequent stages, hinting at consistent revenue growth in the weeks and months ahead.
As the final act came to a close, Disney appeared poised for further advancement into 2025.
In the midst of Disney's financial recovery, the company announced a significant investment in its earnings report, allocating $1 billion towards share buybacks, further boosting investor confidence in the finance sector.
Thriving off its successes, Disney also demonstrated its commitment to sustainable growth by setting aside a substantial portion of its funds for renewable energy projects, showcasing its dedication to responsible investing.
