Disney’s Stellar Stock Performance in 2020

 by Ray Keating

Analysis

DisneyBizJournal.com

January 3, 2021

 

In the midst of the COVID-19 pandemic and an assortment of government-ordered business shutdowns, the performance of the stock price of the Walt Disney Company (NYSE: DIS) during 2020 was robust.

How can that be? Well, it’s essential to keep in mind that stock prices reflect investor beliefs or expectations of future company performance, that is, future cash flow or earnings. So, for example, the recent run-up in the Disney stock price since late October largely has been about expectations regarding the growth of Disney’s business post-pandemic. Indeed, that’s been the case since the recent low in Disney stock price was registered in March, with new information and uncertainties sprinkled in along the way, of course.

 

Consider that the Disney stock price started to get hit hard by pandemic concerns in late February, with the stock price plummeting from $141.30 on February 19 to $85.76 on March 23. Subsequently, the stock price fought its way back, though unevenly so, in the following weeks. It had climbed back to $135.54 by August 28, but then resumed a gradual decline, closing at $118.47 on October 28.

 

From late October to the end of the year, however, the Disney stock price rose robustly, closing at $181.18 on December 31, thanks to positive outlooks for the Disney streaming services and how coronavirus vaccines will aid the rest of the Disney leisure, travel and entertainment businesses.

 

So, let’s sum up this past year’s stock performance. The Disney stock price ranged from a low of $79.07 to a high of $183.40.

 

How did Disney’s performance compare to the market at large? Let’s consider the stock price gain from two points over the past year – from January 1 to December 31, and from that March 23 low closing price to December 31.

 

From January 3, 2020, to December 31, 2020, the Disney stock price increased by 23.7 percent. That compared to a 6.9 percent gain in the Dow Jones Industrial Average, and an increase of 16.1 percent in the S&P 500.

 

And from March 23, 2020, to December 31, 2020, Disney’s stock price jumped by 111.3 percent. That compared to a 64.6 percent increase in the Dow Jones Industrial Average, and a gain of 67.9 percent in the S&P 500.

 

Whether one takes the full-year gain of 23.7 percent or the 111.3 percent move up from the March 23, there’s no way to classify Disney’s stock performance in 2020 other than stellar.

 

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Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of the Pastor Stephen Grant novels and assorted nonfiction books. He can be contacted at raykeating@keatingreports.com.

 

The views expressed here are his own – after all, no one else should be held responsible for this stuff, right?

 

Keating’s new book Vatican Shadows: A Pastor Stephen Grant Novel is the 13th thriller/mystery in the Pastor Stephen Grant series. Get the paperback or Kindle edition at Amazon, or signed books at www.raykeatingonline.com. 

 

You also can order his book Behind Enemy Lines: Conservative Communiques from Left-Wing New York  from Amazon or signed books  at RayKeatingOnline.com. His other recent nonfiction book is Free Trade Rocks! 10 Points on International Trade Everyone Should Know. 

 

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