The worst-performing Dow Jones stocks this year include Walt Disney (DIS), Verizon (VZ), Merck (MRK), Boeing (BA) and Honeywell (HON).
Disney stock and Verizon saw double-digit percentage losses while the overall Dow Jones stock index finished up 19% for the year. Boeing stock, Merck and Honeywell booked losses in the single digits.
Worst Dow Jones Stock
Disney stock tumbled 14% through Dec. 28, making it the worst-performing Dow Jones stock for the year. DIS stock sank 8.3% in Q4.
A slowdown in Disney+ subscriber growth hurt the media and entertainment giant. In 2020, Disney’s streaming service had offset the pandemic’s negative impact on other Disney businesses, ranging from movies to cruises to parks. But Disney+ subscriber growth had slowed recently as Covid restrictions loosened and people sought entertainment outside their homes. Then the omicron variant set things back again.
Disney stock is trying to reclaim the 10-week line but remains well below the 40-week line. The relative strength line is lagging, near multiyear lows, according to MarketSmith chart analysis. The RS line measures a company’s performance against the S&P 500 index.
For its latest quarter, Disney missed earnings and sales views. But Wall Street analysts expect Disney earnings to jump 80% in fiscal 2022 as sales climb 24%. They’re seen growing further in 2023, but at a slower pace.
Shares of Verizon fell 10% this year, earning the telecom giant the second worst Dow stock title. In Q4, Verizon stock has dipped 2.4%.
Analysts warn that Verizon risks losing its “best network” status to T-Mobile (TMUS). It faces a tough competitive environment more generally. For example, the company relies on cable companies Comcast and Charter Communication for its MVNO (mobile virtual network operator) deals, which underlie earnings growth.
Verizon stock has regained the 10-week line but remains well under the 40-week line. Its RS line plunged this year after making a high in 2020.
In its latest quarter, Verizon delivered a mixed report. Analysts foresee Verizon earnings rebounding 10% in all of 2021 as sales rise 4%. Both earnings and sales are seen falling in 2022.
Shares of Merck shed 6% this year, making it the third worst Dow Jones stock. In Q4, Merck stock is up 2.3%, but with some wild swings.
Analysts worry that Merck’s oral coronavirus pill molnupiravir may not compete effectively against a rival Pfizer (PFE) product. That could mean billions in lost coronavirus drug revenue.
Merck stock is retaking the 40-week line but is still under the 10-week line. It undercut the 10-week line, a key support level, in late November amid molnupiravir concerns. Its RS line has slid to multiyear lows.
For its most recent quarter, Merck beat earnings and sales estimates. In all of 2021, Merck earnings are seen rising just 3% as sales grow 1%. But they’re seen leaping 24% in 2022 as sales increase 17%.
Shares of Boeing gave up 4% this year, making it the fourth worst Dow stock. In Q4, Boeing stock sank 6.3%.
The plane-maker battled production issues with the 787 Dreamliner in 2021. And it faced lingering 737 Max issues after the jets were grounded following two fatal flights. Now Boeing’s mulling a stock sale to pay down debt from the 737 Max grounding.
Boeing stock is fighting to take back the 10-week line and is below the 40-week line. The lagging RS line is at multiyear lows after a plunge in 2019 and 2020.
For its latest quarter, Boeing posted an overall miss. But analysts expect the aerospace giant to trim net losses per share in 2021. They see Boeing earnings returning in 2022 as sales jump 35%.
Shares of Honeywell lost 3% this year, making it the fifth worst Dow Jones stock. In Q4, Honeywell stock retreated 2.5%.
The aerospace supplier faces supply chain and inflation challenges, analysts say. More generally, surging raw material prices and supply constraints raised costs for many industrial companies. Amid those woes, Honeywell’s defense and space business was especially hard hit.
Honeywell stock remains stuck below both the 10- and 40-week lines. The 10-week line is below the 40-week line, an uninspiring sign. The RS line for HON stock shows severe lag.
For its latest quarter, Honeywell beat on earnings but missed on sales. Analysts forecast Honeywell earnings will grow 14% in 2021 as sales rise 6%. Growth rates are expected to be roughly similar in 2022.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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