Prediction: Disney Will Beat the Market. Here's Why.

Core Viewpoint - Walt Disney is poised to outperform the market in 2025 after a strong performance in 2024, where shares rose 24%, aligning with the S&P 500 [1][4]. Group 1: Recent Performance and Growth - Disney's recent successes include the release of the three highest-grossing movies of 2024 and a profitable Disney+ streaming segment, which had previously incurred billions in losses [3]. - The company's market cap has surpassed $200 billion, reflecting a turnaround since Bob Iger's return as CEO, although revenue growth has been modest, remaining in the single digits for four of the last five fiscal years [4]. - In fiscal 2024, Disney exceeded Wall Street profit targets for all four quarters, with net income growing significantly faster than revenue, which increased by only 3% [5]. Group 2: Future Outlook and Strategies - Analysts project a modest 4% revenue growth for fiscal 2025, while Disney's guidance anticipates adjusted net income to rise in the high single digits [6]. - The company is focusing on long-term growth through expansion projects at domestic theme parks and scalability for Disney+ [7]. - Disney plans to add another cruise ship to its fleet and has made significant announcements regarding its premium cruise line, which is crucial for future growth [8]. Group 3: Upcoming Releases and Market Position - In 2025, Disney will release new installments in popular franchises, including Captain America and Avatar: Fire and Ash, which is expected to be a major box office success [9]. - Disney's stock is currently trading at a reasonable 20 times this year's adjusted earnings estimate, with expectations of a return to double-digit bottom-line growth in fiscal 2026 and 2027 [10]. - As valuations for many tech leaders are extended, Disney is emerging as a compelling flight-to-safety investment for 2025 [11].