Netflix is a reasonable comparison and over the last five years their stock is up 12% so also lagging behind the S&P. No doubt significantly better than Disney but again, not great. Give Netflix linear programming and their stock drops.
Comcast is more diversified than Disney and has a built-in revenue generator in what essentially amounts to a utility at this point that Disney does not and will never have. I think people severely underestimate how big that is. Basically 20ish% of all US households must pay Comcast every month to stay online. Without that do you think their stock would be doing as well? Even with that it is trailing the S&P by a healthy amount which is what the original poster was using as a measure.
Amazon is not comparable. It is a massively profitable store and tech giant with AWS offerings. Sales on the website alone bring in more money than the entire Disney company makes in a year and so does AWS. Prime video is the only thing they really have that is comparable and if Amazon suddenly was left with just that, they wouldn't be doing great either.
So yes, when looking at the entire company, I think Disney is more comparable to pure entertainment companies as that is all they offer. It still isn't a great comparison but it is the closet in terms of product diversification. Now if you are looking at individual segments, that is a whole other story. Want to just look at parks, Comcast is the best comparison. Looking at studios, any of the major ones. Streaming, again, any of the major ones. Same with TV or merch sales.
The whole point is that any company that has a significant portion of its business squarely in the entertainment industry is going to be underperforming the market at large. How much depends on what else the company has to balance out the panic from the street.
Good points. I'd agree an entertainment company may underperform the broader index, but Disney is still a fantastic brand with unbelievable assets, consumer credibility, diversified entertainment options, products, and a huge streaming platform.
It's a travesty Disney is worth less than Netflix as Disney has many other businesses and much more IP than NFLX. The fact the market values them more than Disney is proof of Disney's ineptitude.
NFLX at +13% isn't good for 5 years, but it's a hell of a lot better than -23% from Disney with what should be a far better company. Disney has problem assets, but those have been poorly managed.
You can say Disney's linear networks are an anchor all you want, but it's poor management. They are still profitable and should be managed with careful decision making to continue to make them profitable as they shrink and other businesses grow. That's management which Disney doesn't have. They paid ESPN talent far too much and stopped being a sports channel. ABC has awful content in general. They overpaid for sporting rights too.
Prior to 2020, Disney is fully capable of $12B+ net income annually while Netflix is making $4-5B. Now Disney is making $3B. I get it, some TV challenges exist and margins have changed, but it's just been handled so poorly. Every quarter they have some "special item" that kills their profitablity. They did a decent job with Disney+ but failed to control spending and implement a profitable pricing model so now that's a drain too.
Amazon isn't "massively profitable" on the retail side. From memory, they literally have 1% margins and most of their profit is AWS and Prime. Not arguing they are comparable with Disney, they aren't.
Disney is unique and a leader in entertainment. They have the highest quality assets by far. They have parks which have been extremely profitable. They have consumer products, a worldwide brand, ESPN, Hulu, Fox, Disney+, and others which they continually overspend and fail to promote a decent strategy. They lose money consistently and only make money at parks through pricing power.
I just really think Disney's board and management team is lost. The fact they even made Chapek CEO shows they are idiots but when they finally realized he was terrible, they brought back another dinosaur that had his run because they didn't know what else to do. I think Iger is horrible for Disney at this time. They need a younger, hungrier CEO with more energy and can play both sides.
