$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 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 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. 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 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.

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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)