Burbank, California-based The Walt Disney Company (DIS) operates as an entertainment company worldwide. Valued at $204.5 billion by market cap, the company's businesses include, media networks, parks and resorts, studio entertainment, consumer products, and interactive media.
Shares of this entertainment giant have underperformed the broader market considerably over the past year. DIS has gained 17.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 20.9%. However, in 2025, DIS stock is up 2.4%, surpassing the SPX’s 1.9% rise on a YTD basis.
Narrowing the focus, DIS’ underperformance looks more pronounced compared to the Communication Services Select Sector SPDR ETF Fund (XLC). The exchange-traded fund has gained about 28.7% over the past year. Moreover, the ETF’s 6% gains on a YTD basis outshine the stock’s returns over the same time frame.
Disney's underperformance stems from challenges in its streaming pivot and theme parks, declining legacy media business, and rising operational costs. Despite improving streaming profitability, investor concerns persist due to modest Disney+ growth forecasts, upcoming expenses for Disney Cruise Line, and increasing competition in the rapidly evolving entertainment landscape.
On Nov. 14, DIS shares closed up more than 6% after reporting its Q4 results. Its adjusted EPS of $1.14 surpassed Wall Street expectations of $1.09. The company’s revenue was $22.57 billion, missing Wall Street forecasts of $22.59 billion.
For fiscal 2025, ending in September, analysts expect DIS’ EPS to grow 8.9% to $5.41 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 29 analysts covering DIS stock, the consensus is a “Strong Buy.” That’s based on 20 “Strong Buy” ratings, two “Moderate Buys,” and seven “Holds.”
This configuration is more bullish than a month ago, with 18 analysts suggesting a “Strong Buy.”
On Feb. 3, Bernstein analyst Laurent Yoon maintained a “Buy” rating on DIS with a price target of $120, implying a potential upside of 5.3% from current levels.
The mean price target of $128.48 represents a 12.7% premium to DIS’ current price levels. The Street-high price target of $147 suggests an upside potential of 28.9%.
