Disney shares staged one of their strongest single-day rallies this millennium Thursday on the back of the company’s blowout earnings report, though the entertainment titan still has a ways to go to recapture its former glory on the stock market.
Disney CEO Bob Iger appears at Disney's Shanghai resort in December.
Disney’s stock ballooned almost 13% to just shy of $112 by mid-afternoon, hitting its highest intraday level since Feb. 9, 2023.
Should the gains hold, Thursday will be Disney stock’s best day since December 2020 and its fifth-best day since 2000, according to FactSet data.
The dramatic rise for Disney came a day after the company delivered strong quarterly results and projected $4.60 earnings per share for its fiscal year ending in September, which would make 2024 its most profitable fiscal year since 2019.
Bank of America was among several Wall Street firms to dramatically bump its price target for Disney, upping its target from $110 to $130, with analysts led by Jessica Reif Ehrlich remarking they were “incredibly encouraged” by Disney’s bottom line progress under the tutelage of CEO Bob Iger, whose initiatives “are already having an impact” 15 months into Iger’s second tenure at the helm of Disney.
Even after Thursday’s recovery, Disney remains a badly battered stock. Shares are down 44% from their 2021 peak, needing a nearly 100% further gain to hit a new all-time high, and Disney has underperformed the S&P 500 on a two-year, three-year, five-year, 10-year, 15-year and 20-year basis. Even if Disney meets its own forecast of a $4.60 profit per share this year, that’s still about 36% short of its record profit achieved in 2018, and analysts don’t project Disney to return to its 2018 profitability until 2028, according to FactSet.
“We cannot help but wonder what would have happened without an activist present,” remarked Daiwa analyst Jonathan Kees, tipping his hat toward the so-far unsuccessful activist investor campaign helmed by billionaire Nelson Peltz aimed at installing margin-hungry board members and curbing Iger’s power.