With Walt Disney Stock Sliding, Have You Assessed The Risk?

Walt Disney (DIS) stock is down 7.7% in a day. The recent slide reflects renewed concerns around mixed Q4 earnings and linear TV declines, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?

Before judging its downturn reslience, let’s look at where Walt Disney stands today.

• Size: Walt Disney is a $194 Bil company with $95 Bil in revenue currently trading at $107.61.
• Fundamentals: Last 12 month revenue growth of 5.0% and operating margin of 14.8%.
• Liquidity: Has Debt to Equity ratio of 0.22 and Cash to Assets ratio of 0.03
• Valuation: Walt Disney stock is currently trading at P/E multiple of 16.8 and P/EBIT multiple of 15.1
• Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 115% within a year. See DIS Dip Buy Analysis.

These metrics point to a Moderate operational performance, alongside Moderate valuation – making the stock Fairly Priced.

That brings us to the key consideration for investors worried about this fall: how resilient is DIS stock if markets turn south? While we like to buy dips when the fundamentals check out (see Buy or Sell DIS Stock) – we stay wary of potential falling knives.

This is where our downturn resilience framework comes in. Suppose DIS stock falls another 20-30% to $75 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Equities is not the only thing we do. Is a portfolio of 10% commodities, 10% gold, and 2% crypto in addition to equities and bonds – likely to return more and protect you better? We have crunched the numbers.

Below are the details, but before that, as a quick background: DIS operates worldwide as an entertainment company providing media distribution, theme parks, resorts, and related experiences through its global segments and subsidiaries.

2022 Inflation Shock

• DIS stock fell 60.7% from a high of $201.91 on 8 March 2021 to $79.32 on 4 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $124.01 on 30 June 2025 , and currently trades at $107.61

 
2020 Covid Pandemic

• DIS stock fell 42.1% from a high of $148.20 on 2 January 2020 to $85.76 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 24 November 2020

 
2018 Correction

• DIS stock fell 16.3% from a high of $115.84 on 27 April 2017 to $96.93 on 12 October 2017 vs. a peak-to-trough decline of 19.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 6 August 2018

 
2008 Global Financial Crisis

• DIS stock fell 57.3% from a high of $36.55 on 8 May 2007 to $15.59 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 21 April 2010

 
It is a good thing to keep in mind how low DIS could go during a downturn. And you should also check how the stock fared when compared with the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.