Disney (DIS, Financial) just gave investors a reason to smile—kind of. The company announced a 33% dividend increase to $1 per share, split into two payouts. But before you get too excited, this still leaves Disney's yield below 1%, barely enough to catch the eye of income investors. What really matters is the bigger picture: a year of restructuring under Bob Iger, $5.5 billion in cost cuts, and a focus on growth. Disney's fiscal 2024 revenue hit $91.4 billion, while its streaming business turned a profit ahead of schedule. The theme park division, though, remains a sore spot, with revenue barely budging and operating income sliding 6%. Are families priced out? The jury's still out.
On the upside, Disney's Hollywood magic is stronger than ever. Moana 2 smashed records with a $221 million domestic opening, following a banner quarter for its film studio. Analysts are taking notice. Morgan Stanley, Evercore ISI, and Guggenheim all raised price targets, citing strong earnings momentum and long-term growth potential. Disney's shares are up 30% year-to-date, outpacing the S&P 500. And the future looks promising—management is projecting double-digit earnings growth by 2026, buoyed by a reinvigorated content strategy and fresh experiential investments.
But let's not sugarcoat it. Challenges remain. Streaming competition is cutthroat, theme park pricing is a potential Achilles' heel, and Iger's planned 2026 exit raises questions about leadership stability. Disney's story is far from wrapped up, but with a blockbuster year behind it and ambitious plans ahead, there's a sense of cautious optimism in the air. For investors, the real magic will be in how well Disney navigates these waters to deliver sustained growth.
