After finally catching up with the market in 2024, Disney is gearing up to outshine it in 2025. Over the past year, Walt Disney (DIS 1.76%) shrugged off its years of lagging performance and saw its stock rise by 24%, aligning with the S&P 500 — a long-awaited achievement for the entertainment powerhouse. Now, Disney is poised to not just meet the market’s pace, but to lead it.
There are a number of factors that could propel Disney from a market underdog to a front-runner in the coming year. Let’s explore some of the elements that might help transition it from laggard to leader.
You can’t spell mouse without "mo"
Momentum is working in Disney’s favor these days. Many of its past challenges are now turning into strengths. Following a rare year in 2023 when Disney didn’t top the box office, the company came back strong in 2024 with three of the highest-grossing films. Disney+’s streaming division, which previously faced billions in losses, hit profitability sooner than anticipated. Moreover, its theme parks, which had been shuttered during the pandemic, are now even more profitable than pre-pandemic times.
With Disney’s market value surpassing $200 billion, the optimists are finally getting their happily ever after after years of waiting. Not everything is perfect, though. For four out of the last five fiscal years, revenue growth has only been in the single digits. Since Bob Iger’s return as CEO, the focus has been more on boosting profit margins.
Walt Disney has consistently surpassed Wall Street’s profit expectations over the four quarters of fiscal 2024. Although revenue saw just a modest 3% increase, adjusted earnings surged by 32%, with the latest quarter alone showing a 39% jump.
The good and the bad of 2025
Iger has nearly completed his streamlining goals as he prepares to step down by the end of next year. At first glance, 2025 might seem somewhat uneventful. Analysts project a modest 4% revenue growth for fiscal 2025. Disney’s own forecasts suggest adjusted net income will climb in the high single digits.
This year seems to be less about reaping the rewards and more about planting seeds for future growth. Disney is investing heavily in major expansion projects at both domestic parks, which will begin to pay off as they open in the coming years. Now that Disney has a profitable streaming platform, it’s laying the foundation for the future scalability of Disney+.
The company is also expanding its cruise line with another ship set to join its fleet this year, and it has announced several premium additions in recent months. This expansion is more significant than it might seem. While Disney’s stock saw a 24% increase in 2024, the three largest cruise companies nearly doubled that, with an average growth of 47%. Despite Mickey Mouse growing his fleet rapidly, the cruise industry as a whole experienced even greater gains.
Looking to its cinematic ventures, Disney has sequels and new entries from Captain America, Zootopia, and Lilo & Stitch slated for release in 2025. But the year’s highlight will likely be the December debut of Avatar: Fire and Ash, with the previous two films in the James Cameron series ranking among the top three biggest earners in history.
Is Disney stock a bargain right now? The beloved brand is trading at a reasonable 20 times this year’s projected adjusted earnings. Looking ahead, Disney anticipates a return to double-digit earnings growth by fiscal 2026 and 2027. To ensure a smooth leadership transition this time around, Disney’s board plans to announce Bob Iger’s successor early next year.
Negative trends are turning into positive momentum. With some of the recent market tech leaders facing inflated valuations, Disney is becoming an appealing safe haven for investors in 2025. The stakes are high, and Disney knows it needs to nail this opportunity, ready to win over investors watching closely.
