Disney's weak stock performance puts CEO Bob Iger's legacy at risk

Bob Iger is approaching the conclusion of his long-term return as CEO and has led several key business enhancements at Disney. 

The company has revealed ambitious plans for expanding parks and experiential offerings. ESPN is strengthening its streaming focus as traditional TV packages decline.

Yet, the stock remains approximately 43% below its March 2021 high, potentially affecting Iger's long-lasting impact.

Throughout Iger's initial 15-year term as CEO, which concluded in 2020, Disney's stock flourished as he reinvented the company through strategic acquisitions — Pixar, Marvel, and Lucasfilm — that fueled its films, TV series, retail products, and parks. 

The initiation of the Disney+ streaming service in 2019 ignited a growth era that drove the stock to an all-time peak of $198.60 in March 2021.

Since that time, Disney has significantly underperformed relative to the S&P 500. Currently, Disney's stock trades near $114 — up roughly 24% since Iger resumed his role as CEO. In contrast, the S&P has appreciated around 75%.

"Disney was the one stock in media that you could compare to everyone else," longtime Bank of America analyst Jessica Reif Ehrlich said, referring to the broader market. "This is the lowest relative valuation it's had in more than 40 years."

"Disney's strong foundation gives it potential for growth, even amidst the stock's underperformance. Being part of a diversified portfolio allows for a patient approach," shared Dia Adams, a Disney enthusiast and travel consultant.