Disney Stock Has Struggled. One Solution: Go Big on Cruise Ships.

(Illustration by Elias Stein)

Walt Disney is known for film franchises, television, and theme parks. Now, Mickey is betting big on cruise ships.

Disney bolstered its fleet with the Treasure last year, launched the Destiny this past week, and expects its largest ship, the Adventure, in March. “Aside from the streaming business, a focal point for Disney investors over the next year is the cruise-line business,” wrote Seaport Research’s David Joyce this past week. The new ships, he said, could add over $2.8 billion of revenue and over $500 million of operating income for Disney next year. He rates Disney a Buy with a $130 price target. The stock closed at $104.26 on Friday, down 6.4% for 2025.

Created with Highcharts 9.0.1The Lure of the SeaThe stock of media conglomerate Walt Disney has suffered this year. Cruise line​Carnival held up until recently.Source: FactSet

Created with Highcharts 9.0.1CarnivalWalt Disney2025Nov.-40-30-20-10010203040%

Cruising isn’t cheap. Disney noted on its fourth-quarter earnings call that fiscal-year capital expenditure increased to $8 billion from $5.4 billion, mostly due to fleet expansion. “We’ve made big investments in cruise, and we’re expecting cruise to be a meaningful contributor to growth of experiences…particularly in the second half as we get past the launch costs,” said CFO Hugh Johnston.

Created with Highcharts 9.0.1Mostly Fair WindsThe global cruise-line industry has been steadily growing, except for the pandemic​years. Passenger VolumeSource: Cruise Lines International Association

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This growth counters concerns about theme park demand. Competition is up, particularly after Comcast opened Universal’s Epic Universe in Orlando this year. And inflation persists. Disney said on its earnings call that park demand “basically came in line with our expectations,” while cruise demand was “very, very strong, despite the fact we’ve added as much capacity as we have.”

Write to Angela Palumbo at angela.palumbo@dowjones.com

Last Week

Markets

Investors awaited Nvidia earnings as the week began. Bitcoin fell below $90,000 for the first time in seven months, and stocks sold off. On Tuesday, Nvidia shed 2.8% ahead of its Wednesday earnings call. Nvidia earnings then blew past expectations, CEO Jensen Huang dismissed bubble talk, and delayed September jobs data beat expectations. Stocks promptly sank. On the week, the Dow industrials lost 1.9%; the S&P 500, 2%; and the Nasdaq Composite 2.7%.

Companies

Walt Disney ended its standoff with YouTube after 15 days. Bankrupt opioid maker Purdue Pharma reached a $7.5 billion settlement requiring its former owners, the Sackler family, to pay up to $6.5 billion to victims. Purdue will transfer most of its assets to a new company, Knoa Pharma. Elon Musk’s xAI is in talks to raise $15 billion, for a $230 billion valuation. A U.S. District judge said Meta Platforms’ acquisitions of Instagram and WhatsApp didn’t stifle social-media competition.

Deals

Merck said it was acquiring Cidara Therapeutics for $9.2 billion, and Johnson & Johnson is buying Halda Therapeutics for $3.1 billion… Akzo Nobel and Axalta Coating Systems agreed to merge, forming a $17 billion-in-revenue paint company… Palo Alto Networks is paying $3.4 billion for Chronosphere… Warner Bros. Discovery received bids from Paramount Skydance, Comcast, and Netflix…Abbot Laboratories is buying Exact Sciences, owner of Cologuard, for $21 billion.

Next Week

Monday 11/24

A strong third-quarter earnings season winds down with a light calendar in a shortened trading week. Roughly 95% of S&P 500 index companies have reported results, with more than 80% of them having beaten earnings-per-share estimates and about 75% surpassing sales expectations. Agilent Technologies and Zoom Communications announce results on Monday, while Analog Devices, Autodesk, Dell Technologies, HP Inc., Workday, and Zscaler follow suit on Tuesday. Deere holds a conference call to discuss earnings on Wednesday.

Tuesday 11/25

Even though the federal government has reopened, there are still delays in reporting economic data on schedule as older data are reported first. The Bureau of Labor Statistics won’t release another jobs report or consumer price index before the Federal Open Market Committee’s Dec. 9-10 monetary-policy meeting.

The Census Bureau reports retail sales data for September. In August, retail sales rose 0.6% month over month to $732 billion.

Thursday 11/27

Equity and fixed-income markets are closed in observance of the Thanksgiving holiday.

The Numbers

$13.5T

Current value of U.S. mortgages debt, some 44% of GDP, down 30 percentage points since 2007-09.

14.1%

The U.S. office vacancy rate, near a record high. Of the 12 largest markets, five are at 25-year highs.

$8T

The amount of foreign-exchange reserves of 11 Asian monetary authorities, up some $400 billion this year.

51

November reading of the University of Michigan consumer sentiment survey, remaining at a near-record low.

Write to Robert Teitelman at bob.teitelman@dowjones.com