Why has the market fallen out of love with Disney?
Bob Iger is nearing the end of a multi-year comeback run as CEO and has overseen several key improvements to Disney’s business. Streaming has stopped bleeding cash. The company has mapped out a major expansion pipeline for parks and experiences. ESPN is bolstering its streaming strategy as the pay-TV bundle continues to shrink.
Despite this, the stock is sitting about 43% below its 2021 peak — and it could leave a dent in Iger’s legacy.
During Iger’s 15-year first run as CEO, which ended in 2020, Disney’s stock surged as he transformed the company through acquisitions — Pixar, Marvel, and Lucasfilm — that powered its movies, TV shows, consumer products, and parks. The introduction of the streaming service Disney+ in 2019 set off a growth narrative that saw the stock reach its all-time high of $198.60 in March 2021.
Since then, Disney has fallen well behind the S&P 500. Disney is trading around $114 — up about 24% from the start of Iger’s second term as CEO. By comparison, the S&P has gained around 75%.
“Disney was the one stock in media that you could compare to everyone else,” longtime Bank of America analyst Jessica Reif Ehrlich said, referring to the broader market. “This is the lowest relative valuation it’s had in more than 40 years.”
Disney is operating within a complicated environment for media giants during Iger’s second run, which is reflected in the varied stock performance of its competitors. Disney has no exact peer, but shares of its biggest rival, the pure-play streamer Netflix, have gained nearly 206% since November 2022, when Iger returned to Disney. Warner Bros. Discovery — which includes a storied Hollywood studio and HBO — was lagging until takeover interest fueled a stock run. Its shares are up 165% in that time period. Shares of NBCUniversal owner Comcast, which is dealing with both a troubled cable business and a sub-scale streamer, have declined about 12%.
Disney employees and everyday investors who spoke with Business Insider said they were frustrated by the stock’s performance, but most believed it would eventually rebound.
“The fundamentals are there, and while the stock has lagged, it’s part of a diversified portfolio, so I can afford to wait it out,” said Dia Adams, a Disney fan and travel agent.
So, what’s holding back the stock?
Wall Street analysts describe Disney as comprising three separate but interconnected businesses, each with its own distinct risk profile. At any given time, one of them looks shaky enough to hamper Disney’s overall growth story.
Entertainment: migrating toward a questionable streaming future
Disney’s Entertainment division, which spans linear TV networks, streaming services, and studios, is the most complex piece. Revenue from Disney’s traditional TV business continues to decline as viewers shift away from the medium. That was on full display in Disney’s fiscal fourth quarter ending September 27, with linear operating income falling 21% year over year.
The streaming business has been a bright spot, with operating income up 39% year over year in the fourth quarter. However, skeptics are concerned about streaming’s ability to replace linear TV’s decline and point out that growth is increasingly coming from outside the US, where people are often more price-sensitive.
The streaming wars could also get tougher for Disney moving forward. Netflix and Paramount Skydance are in a bidding war over Warner Bros. Discovery, and whichever combination emerges will create a larger rival that could put pressure on Disney.
Then there’s Disney’s studio business: hit-driven and expensive.
Wall Street was looking for Iger to work his magic on the movie business, and the films were “horrific” in Disney’s 2025 fiscal year, Ehrlich said. The company blamed a decline in studio revenue on comparisons to the prior year’s “Deadpool & Wolverine” and “Inside Out 2.” Things have been looking up, though, with the blockbuster performance of “Zootopia 2” at the box office.
Experiences: a money-printing machine being pushed hard
The Experiences division encompasses theme parks and cruise ships, and has become a top driver of profit for Disney. The division’s recent strength has relied heavily on price increases rather than a bump in attendance.
That raises a key question: How much pricing power does Disney have left?
In 2025, domestic park attendance decreased 1%, according to Disney’s annual report. Disney has also faced concerns about competition in Florida from Comcast’s recently opened Epic Universe, and about the delayed debut of Disney Adventure in Singapore, now scheduled for March.
Sports: a growth story hampered by rising costs
Sports is the smallest segment of Disney’s business by revenue, but it has a clear growth story.
ESPN is modernizing for streaming with a newly enhanced app and big direct-to-consumer ambitions. That said, the cost of sports rights is increasing, and competition is intensifying — not only from traditional rivals like Fox, but also from deep-pocketed tech companies such as YouTube and Amazon.
Disney’s sports spending was a topic on its latest earnings call after it paid more than a 73% increase for NBA rights in its latest deal, which kicked off with the 2025-2026 season. The company said the value to audiences and advertisers was big, even if the cost creates some “bumpiness” in financial results.
How much does the new CEO matter?
Wall Street sees no quick fix for Disney’s stock. Analysts want proof of steady, repeatable earnings growth, whether from a stronger film slate, improved streaming profitability, or an expected lift from the cruise business in late 2026.
The stock price matters in ways that affect Disney operationally. Equity is critical to retaining top executives, and stagnant shares can dull the appeal of stock-based pay. This could complicate the job of Disney’s next CEO.
Disney’s CEO succession has become a favorite parlor game, with chatter centering on Experiences chief Josh D’Amaro and Disney Entertainment co-chair Dana Walden.
Regardless of who is chosen, investors are hoping for steady leadership over reinvention. The desire for continuity limits Iger’s ability to make sweeping changes in his final months.
“Typically, CEOs will try very hard to exit on a high note,” said Laurent Yoon, US media and telecom analyst at Bernstein. “For Iger, it’s certainly not good. It’s going to be difficult to get stock in a good direction, at least near term.”
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