Disney’s Decade of Drift May Finally Be Ending

by | Aug 3, 2025 | The Doctor's Dose

Disney’s Next Act: Moving On From a Lost Decade

A decade ago, Walt Disney Co. was rocked by the beginning of a massive media disruption. On August 4, 2015, the company slashed forecasts due to falling subscriber counts at ESPN—then its most lucrative asset. The stock tumbled 9% in a day, dragging down the entire traditional media sector and marking the symbolic start of what would become a lost decade for Disney stock.

Fast forward to mid-2025, and the stock is trading at roughly $121, almost exactly where it stood ten years ago. While the broader market and streaming-first competitors like Netflix have soared (Netflix returned 955% during that span), Disney shareholders have eked out just 10% total returns, including dividends.

But the narrative may finally be shifting—and for the better.

Disney stock revival

🎢 Disney’s Strategic Pivot: From Media to Experience

According to Morgan Stanley’s Benjamin Swinburne, Disney has transformed from “a media company that owned theme parks” into “a theme park company that owns media assets.”

This is more than a rhetorical flourish:

  • Theme parks and experiences generated $9.3 billion in operating profit last year, accounting for 59% of the company’s total.

  • That compares to just 22% from traditional “linear networks” like ABC and ESPN—once Disney’s dominant profit centers.

With new cruise ships on the horizon, an ambitious theme park planned in the UAE, and continued strong demand despite inflationary pressures and political controversy, Disney’s Experiences division remains the company’s financial engine.

📈 Disney Stock Revival: Modest Valuation, Growing Optimism

Disney stock has risen 38% in the past year, outperforming the S&P 500 by 19 percentage points. Since Barron’s featured Disney in July 2023, the stock is up 45%. Still, at 21x forward earnings, Disney trades only slightly below market multiples—not exactly a screaming value.

However, Wall Street sentiment is bullish: over 75% of analysts rate it a Buy, a higher share than Netflix. The company’s underlying performance is finally catching up to investor optimism.

The question now is whether Disney can convert that optimism into sustained performance.

📺 Streaming: Competitive, but Constrained

Disney+ and Hulu are now profitable or breakeven, after years of investment. But as Citi’s Jason Bazinet puts it, Disney’s streaming efforts are “stuck in the middle”:

  • Not dominant enough to rival Netflix, which boasts high daily usage and content scale.

  • Not niche enough to justify pricing like Peacock or HBO Max.

Disney has the IP—Marvel, Star Wars, Pixar—but lacks the endless catalog of filler content needed to retain subscribers long-term. Still, analysts believe there’s ample room for growth, particularly in international markets.

What Disney needs next is consistency: frequent releases, diversified content, and improved engagement metrics. Investors may soon ask whether streaming will become a true second cash cow, or remain an expensive adjunct to theme parks and films.

🏈 ESPN’s Transformation: A Risk Worth Taking?

Once a crown jewel, ESPN’s influence has waned, now contributing about 15% of company profits (down from ~25%). Subscriber numbers have plummeted from 100 million to 65 million. Yet, in this decline lies opportunity.

In fall 2025, Disney will launch a standalone ESPN streaming service—not to be confused with ESPN+—priced at $29.99/month. This direct-to-consumer pivot targets cord-cutters and cord-nevers who have long demanded access to live sports without cable.

This strategy allows Disney to:

  • Protect cable revenue, since current cable customers will get the streaming version at no extra cost.

  • Grow digital relationships, as ESPN streaming will include features like betting, fantasy leagues, and personalization through viewer data.

There’s risk here—streaming ESPN may further accelerate cord-cutting—but the lower base of profitability makes that a manageable gamble.

🎬 Movies: Slumps, Strikes, and Silver Linings

The box office hasn’t been kind lately. Recent flops like Snow White and Pixar’s Elio highlight the problem. But according to Swinburne, the issue is quantity, not quality. Delays from the pandemic and 2023’s Hollywood strikes have reduced studio output.

That’s set to change in 2025 and 2026. Disney’s upcoming releases include:

  • The Fantastic Four (July 2025)

  • A new Avatar (Christmas 2025)

  • Toy Story sequel (Summer 2026)

  • Avengers reboot (Christmas 2026)

With box office revenue expected to approach pre-pandemic levels, Disney could see its film business rebound meaningfully.

💰 Financial Outlook: On Track for a New High

After hitting a pandemic-era low of $7.8 billion in operating profit in 2021, Disney rebounded to $15.6 billion last year, nearly matching its 2016 peak. Wall Street expects $17.5 billion in FY2025, and potentially another $5 billion in growth over the next three years.

This growth will come from:

  • Experience division scale-ups (parks, cruises, new attractions),

  • And Direct-to-Consumer expansion, both in the U.S. and internationally.

Still, even at full strength, Disney+ is expected to generate only about a fifth of Netflix’s operating profit—a sobering reminder of the uphill battle Disney faces in streaming.

🧭 What Comes Next: Leadership and Legacy

CEO Bob Iger is expected to step down in 2026. Likely successors include:

  • Josh D’Amaro, head of the Experiences division,

  • Alan Bergman and Dana Walden, co-chairs of Disney Entertainment,

  • Or James Pitaro, ESPN chairman.

Analysts believe Iger is focused on maximizing shareholder value before his exit—restoring profits, steadying the streaming ship, and ensuring a smooth leadership transition.

Whether the next CEO will double down on streaming or maintain focus on the theme park-led model remains to be seen.

🎯 Conclusion: A Revival With Real Foundation

Disney’s stock revival isn’t just a bounce—it’s a reflection of genuine progress:

  • A thriving theme park business that’s setting profit records,

  • A streaming platform that’s no longer hemorrhaging money,

  • And a media strategy that is finally adapting to 21st-century consumption.

The company may never catch Netflix. YouTube may become the dominant force in global media. But Disney doesn’t have to win every battle—just the ones that matter to its core business.

After ten years in the wilderness, Disney finally looks ready to lead again—on its own terms.