What’s next for Disney? Analysts weigh in after boardroom fight

What’s next for Disney? Analysts weigh in after boardroom fight

Investing in theme parks, staying creative, and making streaming profitable will be key to the entertainment giant’s future.

BY Ellie Stevens

The battle over board seats at the Walt Disney Company came to a close on Wednesday. The challenge was raised by billionaire Nelson Peltz and Blackwells Capital, which argued that Disney had underperformed in streaming. In a multibillion-dollar battle, backers of Disney CEO Bob Iger emerged victorious. 

Now that votes have been cast, what is next for Iger and the Most Magical Place on Earth? In a research note published on Wednesday, analysts from MoffettNathanson weighed in on where the company will likely go from here. They touched on the following points:

  • Shoring up profits for a streaming-centric future: The analysts point out that Disney recently shared a target of double-digit profit margins for its all-important streaming business. To reach this goal, they note, the company will focus on integrating Hulu, catching up to Netflix, and looking more closely at the costs of distributing Disney+. MoffettNathanson estimates that Disney’s DTC division will generate more than $3 billion in profits in 2026.
  • Getting creative: Iger is looking to reignite the creative spirit that famously revived the Disney brand earlier in his career, when the company acquired Marvel and Lucasfilm and turned them into long-running TV and movie franchises. The analysts believe that empowering the company’s creative leadership with the ability to “green-light projects” will ultimately result in more profitable content, with predictions of $100 million by 2026.
  • Making the best of legacy media: While Disney sees a place for traditional television in the future, analysts say, the company has also acknowledged the many challenges facing legacy media in an increasingly digital world. In addition to the joint venture sports-streaming service that Disney is releasing with Fox and Warner Bros. Discovery later this year, the company is planning to finally launch core ESPN offerings in a stand-alone streaming product next year.
  • Investing in theme parks: Disney plans to invest more than $60 billion in its theme parks over the next 10 years, MoffettNathanson says, with the hope of driving even more growth to the physical entities that have become so key to the success of its brand.

As of midday Thursday, Disney shares were trading at around $119 and have stayed relatively flat following the boardroom news. The stock is up more than 31% this year, far outperforming the S&P 500.

 

ABOUT THE AUTHOR

Ellie Stevens is an Editorial Resident at Fast Company and an undergraduate at Northwestern University. 


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