The Walt Disney Company's
What Happened: Bank of America analyst Jessica Reif Ehrlich maintains that Iger's growth-focused approach appears to be taking hold. The bank has reiterated its "Buy" rating on Disney and raised its price target from $130 to $145 per share, reported Business Insider.
"Bob Iger now appears to be in command and control and on a growth offensive," she wrote.
Ehrlich highlighted that Disney's theme park sector continues to perform robustly, with operating income projected to increase in the low to mid-teens in the fiscal second quarter. Furthermore, following a carriage deal with Charter, Disney is set to see a significant boost in net subscriber growth in the same quarter. This agreement, inked in late 2023, enabled certain Charter customers to access Disney+ without additional charges.
Disney's streaming services are expected to reach profitability in the fourth quarter, following a targeted $7.5 billion in cost savings. Ehrlich predicts a surge of 7.5 million new Disney Plus subscribers during this period.
Why It Matters: Despite a continuing proxy battle with activist investor Nelson Peltz, Ehrlich is confident in Iger's strategy, initiated in November 2022. She asserts that Disney's "best-in-class premiere assets" will propel the company's stock price growth. In late March, Disney was reported to be engaged in a proxy fight with Peltz, who expressed skepticism about Disney's management ability to deliver value to shareholders.
Media industry veteran Tom Rogers also voiced his concern about the Disney board's deference towards Iger, particularly in relation to the acquisition of 21st Century Fox assets, as noted in another Benzinga piece.
Price Action: Disney stock closed 0.68% lower on Monday at $121.53, according to Benzinga Pro.
