With the summer vacation season wearing down and kids back in school, some may be wondering if now might be a good time to take a Disney (DIS) vacation. The trouble, however, is that it still costs a lot, despite Disney’s efforts to pare back pricing. This was in response to what Disney called a “softening consumer environment.” But with Disney’s operating profits down 6% despite a 3% gain in revenue, it was clear that something larger was amiss. Especially when other major theme parks were reporting losses of their own.
Disney, in particular, is suffering here; between 2014 and 2024, a single-day ticket to Walt Disney World is up 56%. That might sound like a lot in isolation, but it gets worse when compared to the national rate of inflation, which sits at 32%. It is clear that a Disney experience is getting pricier a lot faster than anywhere else.
Watching It Isn’t Much Cheaper
As a result of the rising prices at the parks, many families are opting to save their money and watch Disney on television instead. But even this is getting troublesome; Disney is currently in a rolling battle with DirecTV over “skinnier bundles.” Disney makes a good chunk of its money by offering packages to linear television providers like DirecTV. These packages often include smaller, less-watched networks to add bulk, filler, and the perception of value.
But with cable cutting on the rise, and streaming video taking its place, the bundle is not especially appealing any more. And DirecTV, in turn, does not want to pay for what it cannot readily resell. Thus, DirecTV is trying to bargain for a “skinnier” bundle, which Disney, of course, does not want to sell as it would be cheaper.
Is Disney Stock a Buy or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DIS stock based on 19 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 7.82% rally in its share price over the past year, the average DIS price target of $118.53 per share implies 34.65% upside potential.
