Disney's sluggish stock threatens to dent CEO Bob Iger's legacy

Core Viewpoint - The market has become disenchanted with Disney, as the stock is approximately 43% below its peak in 2021, despite improvements in various business segments under CEO Bob Iger's leadership [1] Group 1: Company Performance - Disney's stock has seen a significant decline, trading around $114, which is a 24% increase since Iger's second term began, but it lags behind the S&P 500's 75% gain during the same period [3] - The company's Entertainment division is facing challenges, with linear operating income falling 21% year over year in the fourth quarter, reflecting a decline in traditional TV viewership [13] - The streaming segment has shown growth, with operating income up 39% year over year in the fourth quarter, but concerns remain about its ability to offset losses from traditional TV [14] Group 2: Competitive Landscape - Disney's stock performance is under pressure compared to competitors, with Netflix shares up nearly 206% and Warner Bros. Discovery up 165% since Iger's return, while Comcast's shares have declined about 12% [9] - The company is navigating a complex media environment, with no direct peers, making its relative valuation the lowest it has been in over 40 years [6] Group 3: Business Segments - The Experiences division, which includes theme parks and cruise ships, has become a major profit driver, but attendance decreased by 1% in 2025, raising questions about pricing power [17][18] - The Sports segment, while the smallest by revenue, is modernizing with a new app and direct-to-consumer ambitions, but faces rising costs, including a 73% increase in NBA rights [20][21] Group 4: Leadership and Future Outlook - Analysts are looking for evidence of steady earnings growth to improve stock performance, which is critical for retaining top executives and could complicate the next CEO's role [22] - Investors are hoping for stable leadership rather than drastic changes as Iger approaches the end of his tenure, which may limit his ability to implement significant changes [24]