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$1,000, 5 Years Later: Disney Stock Finds Its Magic Kingdom

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$1,000, 5 Years Later: Disney Stock Finds Its Magic Kingdom

Investors who have owned stocks since 2016 generally have experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return in the past five years is 132.1%. But there is no question some big-name stocks performed better than others along the way.

Disney’s Difficult Run: One company that has been a lackluster investment in the past five years is U.S. media giant Walt Disney Co (NYSE: DIS). Disney investors who bought back in 2016 and held on through some extremely volatile times turned a solid profit, but they fell short of the gains of the overall market.

See also: How to Buy Disney Stock

Disney started 2016 in an extremely difficult position. The company had been losing market share to streaming competitors Netflix, Inc. (NASDAQ: NFLX) and others for years.

However, Disney finally started getting aggressive in investing in its own over-the-top streaming services, and the move may have saved the company and its investors.

In 2019, Disney outbid Comcast Corporation (NASDAQ: CMCSA) to complete a blockbuster acquisition of the majority of 21st-Century Fox’s TV and movie assets for $71.3 billion. The move to acquire content came in advance of Disney’s landmark launch of its Disney+ streaming service in November 2019.

At the beginning of 2016, Disney shares were trading at around $103. The stock initially dropped as low as $86.25 in early 2016 amid broad market weakness due to concerns over slowing economic growth in China.

Disney rebounded to as high as $116.10 in mid-2017, but it spent the next two years trading mostly sideways in a range between around $95 and $120 as investors waited to see if Disney could seriously compete in the streaming space.

Related Link: How Much A $1,000 Investment In Qualcomm 5 Years Ago Would Be Worth Today

Disney shares skyrocketed 9% to new all-time highs in April 2019 after the company finally unveiled Disney+ at its investor day event. Disney’s stock continued to soar as high as $153.41 near the time of the Disney+ launch in November 2019.

Unfortunately, the COVID-19 pandemic slammed Disney’s cruise, theme park and movie studio businesses. The March 2020 pandemic sell-off sent Disney shares all the way down to as low as $79.07. However, investors quickly realized a social distancing environment might have been the best thing possible for early Disney+ adoption.

Disney In 2021, Beyond: Skyrocketing Disney+ subscription numbers sent Disney stock soaring to new all-time highs of $190.64 in early 2021.

Overall, Disney investors who bought five years ago and held have generated a sizable profit. In fact, $1,000 in Disney stock bought in 2016 would be worth about $2,186 today, assuming reinvested dividends.

Looking ahead, analysts are expecting Disney to take a breather in the next 12 months. The average price target among the 25 analysts covering the stock is $192, suggesting 2.9% upside from current levels.

(Photo: Candace Lindemann via Wikimedia Commons)

 

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