Can Cruise Ships Help Disney Stock Coast Higher in 2026?

Mickey Mouse is building an armada of cruise ships. It could help Walt Disney (NYSE: DIS) chart a course to higher returns for its swaying, if not seasick, shareholders after years of market-lagging results.

The Disney Destiny embarked on its maiden voyage out of Florida over the weekend. It's the seventh vessel in the entertainment stock bellwether's growing fleet. It won't be the newest ship for long. Disney Adventure -- the largest cruise ship in the company's arsenal -- will begin serving passengers out of Singapore in four months.

The shipyards are busy cranking out new vessels for Disney's floating empire. The pipeline calls for 13 ships navigating the open waters by 2031. This will more than triple the four ships that served it well for years before beginning the aggressive expansion of its cruising business in the summer of 2022.

It's the right call. It's the right port of call.

Image source: Disney.

Fleet-footed

Destiny is the third entry in Disney's Wish class of ships, but every vessel offers a tweaked experience. It's not just about the different characters worked into the bow, stern, and central atrium decor of every boat.

Destiny is unique in that it embraces the theme of heroes and villains. At any point, Cruella de Vil can storm into the De Vil bar -- the first villain-themed lounge on a Disney ship -- and clamor for a rewritten redemption song to replace her demeaning signature track from the animated classic 101 Dalmatians. Guests get whisked in small batches into an intimate parlor to see a card trick performed by The Princess and the Frog voodoo baddie Dr. Facilier. Loki may or may not make a surprise appearance in the atrium.

Disney knows what it's doing. Diehard fans collect pins, trading cards, and rare plushies in the landlubber world. They travel great distances to check out one of the six -- and soon to be seven -- Disney resorts worldwide. Making each ship different encourages repeat sailings across the cruise line, while still retaining many of the core spaces and experiences that attracted them to the brand in the first place.

A date with Destiny

Disney announced that it would be expanding its fleet in the summer of 2019. This was exciting news until the COVID-19 crisis nixed domestic sailings for more than a year. Now, sticking to the maritime buildout in the middle of an industry whirlpool appears to be one of Disney's bravest and smartest decisions.

Cruise line operators may have been the last of the travel and tourism stocks to recover, but they have rebounded in a major way. The two largest operators -- Royal Caribbean and Carnival -- are up 350% and 181%, respectively, over the past three years. Disney investors have only been treated to a 14% gain in that time. It's cruel, because no one has increased its capacity and revenue-generating potential in the cruising space over the last three years more than Disney.

Naturally, Disney is about more than just cruise ships. Its overall business can be held back by the gradual decline of its legacy linear networks business. Disney has also had some misfires on the theatrical front. However, it's hard to argue that Disney's premium cruise line offering isn't a strong growth opportunity.

The media stock doesn't break out its cruise line results. That business is lumped together with its signature theme parks and other House of Mouse experiences in a single line item. The combined segment has been delivering strong results in the past few years, and its cruising performance will only move the needle more with every passing maiden voyage.

One of the more unique experiences aboard the Disney Destiny is part of its rotational dinner service. One meal features an African-inspired setting and menu as performers on a raised stage in the middle of the dining room perform a musical retelling of the classic animated movie The Lion King.

I can close this piece on a Lion King theme by bringing up how bullish momentum for the cruising industry makes this a Hakuna Matata, or "no worries," moment. I can wax empathetic, pointing out that cruise lines being rewarded after overcoming the early pandemic hardship is the circle of life in action. However, since the Destiny is about giving villains a chance to shine, the better closer is one of my favorite lines from The Lion King's villain track, paraphrased from Scar: Disney's teeth and ambitions are bared. Be prepared.

Rick Munarriz has positions in Royal Caribbean Cruises and Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.