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Credit: Inside the MagicAfter a 2023 full of financial disasters and investor panic, Walt Disney Company stock is continuing its surprise boom, making billionaire Nelson Peltz‘s claims that his guidance is necessary for shareholder profit weaker every day.
Last year saw Disney stock hit frequent lows as a consequence of the lingering effects of the COVID-19 pandemic, a series of box office bombs like Ant-Man and the Wasp: Quantumania (2023) and The Marvels (2023), and the entertainment industry’s frantic attempts to avoid renegotiations with actors and writers during the WGA and SAG-AFTRA strikes.
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The diminished Walt Disney Company stock value unsurprisingly led to some attempts to wrest power from Disney CEO Bob Iger, the most recent of which will be decided on April 4, when Disney shareholders vote on whether to maintain the course with the current board of directors or to shift to new leadership.
For months, Trian Fund Management co-founder and activist investor billionaire Nelson Peltz has been arguing that shareholders were constantly losing money under Bob Iger’s reign and that his new plans (announced via a recent earnings call) to invest billions into Disney Parks and partner with Fortnite were just so much “throwing spaghetti at the wall.” While Peltz has received unexpected support from some quarters, the fact that Disney stock has been actively rising for some time now severely undercuts his aggressive messaging.
Disney stock rose another 2% yesterday (via Yahoo Finance) to a current price of ~$118, leading Barclays analyst Kannan Venkateshwar to announce that “the propensity among media investors to be long Disney has resulted in the stock outperforming broader markets meaningfully, thus far this year, at a pace faster than we anticipated.” In layman’s terms, Disney is not only doing better financially than anyone had previously suspected, but it’s doing it faster, too.
That also means that Disney stock has jumped an astonishing 30% from the beginning of 2024, a rise that vastly outstrips the S&P 500 10% rise over that same time period. Essentially, the Walt Disney Company stock is rising at triple the rate of other stocks.
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The Barclays analyst continued, saying that Bob Iger’s announced plans “may be more impactful as a number of turnaround elements still remain work in progress and may manifest more in numbers starting next year…We expect Disney streaming to break even potentially a quarter or two earlier than company guidance of Q4 2024.” If Venkateshwa is correct, Disney could finally begin outmatching Netflix this year, which would make Bob Iger very happy.
With only weeks before the proxy battle, both Bob Iger and Nelson Peltz have accumulated support from massive Disney stock owners like former Marvel Entertainment chairman Ike Perlmutter and Lucasfilm founder George Lucas. But Iger likely has the advantage right now, which is hard numbers and a rising stock price.
What do you think of Bob Iger’s chances to stay on as Walt Disney Company CEO? Let’s hear your thoughts in the comments below!