Is Disney About to Turn a Corner or Fall Off a Cliff?

Analysts are split on Disney's future
Credit: Flickr

It’s been a big week for Walt Disney Company CEO Bob Iger. The week began with the announcement that ESPN was joining Penn Entertainment in creating ESPN Bet. It will be Disney’s first venture into the world of sports gambling. Analysts initially met it with rave reviews, but upon further inspection, they weren’t sure that Disney/ESPN got the best deal with a “second/third tier” gambling company.

Bob Iger, Mickey Mouse

Credit: Disney

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The ESPN Bet announcement came on the eve of Iger’s earnings call with Wall Street investors, where he delivered some mixed news. Iger announced that Disney was clamping down on password sharing on Disney Plus accounts and raising prices. He also told investors that laying off more than 7,000 employees had created more savings than his original estimate of $5.5 billion.

For the second time in two days, Wall Street analysts saw these moves as clear winners, and Disney’s stock saw a nearly five percent bump today.

disney appler merger

Credit: Disney

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Wells Fargo analyst Steven Cahall wrote to clients after the earnings call:

While it’s hardly an easy road ahead we sense a new Disney defined by adaptation, including cost cuts, price increases, content shake-ups, portfolio shaping, etc. Everything is on the table, and this could be the turning point.

So, that’s it? Disney is back, and Bob Iger has saved the company. While that may sound like a great story, it’s not necessarily true. While some analysts saw the rosy picture of Disney, others saw an outlook that is still cloudy.

While Disney Parks saw an increase in revenue, Walt Disney World in Florida saw a decline in Park attendance. Iger laid this at the feet of Disney’s current feud with Florida Governor Ron DeSantis and the closing of Star Wars Galactic Starcruiser.

Iger also changed his tune on the current strikes facing the film industry. Recently, he became the poster child for out-of-touch millionaires after calling the SAG-AFTRA strike “unfortunate.”

Disney CEO Bob Iger

Credit: Disney; Thomas Hawk, Flickr

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Cowen & Co. analyst Doug Creutz told Marketwatch:

We worry that consumers will respond poorly to the move given Disney’s simultaneous decision to cut back on original content, exacerbated by the impact of the Hollywood strikes. Even if the severe price/value shift is accepted by consumers, it’s still not clear if the rate of DTC profitability improvement will more than offset the rate of linear profitability attrition.

Iger tried to maintain an optimistic tone about the strike and Disney’s movie output over the past few months, but it’s hard to deny the results have not been stellar. 

So after a week of talk of streaming, gambling, and growth, we are still no closer to any answers on Disney stock or the future of the Walt Disney Company. With Bob Iger sticking around for longer than expected, he’ll have time to make the necessary changes. Whether every Wall Street analyst will agree with those changes remains to be seen.

We will continue to update this story at Disney Fanatic.

About Rick

Rick is an avid Disney fan. He first went to Disney World in 1986 with his parents and has been hooked ever since. Rick is married to another Disney fan and is in the process of turning his two children into fans as well. When he is not creating new Disney adventures, he loves to watch the New York Yankees and hang out with his dog, Buster. In the fall, you will catch him cheering for his beloved NY Giants.

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