The Walt Disney Company (NYSE:DIS) is engaged in an extended tug-of-war with activist investor Nelson Peltz. Peltz is seeking multiple board seats at the entertainment giant and intends to directly present the case for change to the shareholders. The renewed push for investor activism follows the addition of two new board members to Disney’s board on November 30 and the dismissal of Peltz’s request for a board seat.
CEO Bob Iger also enumerated several keynotes yesterday on completing his first year after his return as CEO. Interestingly, Iger also announced that the board had approved reinstating a cash dividend of $0.30 per share, payable on January 10, 2024.
Here’s the Case Put Forth by Peltz and Disney
Peltz’s Trian Management Fund owns roughly $3 billion of DIS stock. This includes Disney’s ex-executive Isaac Ike Perlmutter’s majority shares. After giving up his push for a board seat in February 2023, Trian has steadily increased his stake in DIS stock. Peltz complained that since February, DIS stock has lost $70 billion in value. Trian wrote in a statement, “Investor confidence is low, key strategic questions loom, and even Disney’s CEO is acknowledging that the company’s challenges are greater than previously believed.”
In response, Disney asserted that the company is on track to achieve cost-saving goals and is reviving its streaming, EPSN, studios, and experiences businesses. Additionally, it will keep updating the board to make sure Disney’s goal is maintained. Importantly, Disney noted that Peltz’s ally, Perlmutter, has a personal agenda against Iger since he was ousted from his role earlier this year. As a result, the company said, “It is relevant to assessing Mr. Peltz and any other nominees he may put forth as directors.”
What is the Price Target for DIS Stock?
Wall Street is also cautiously optimistic about DIS stock as several challenges loom for the House of Mouse company. With 18 Buys, six Holds, and one Sell rating, Disney stock has a Moderate Buy consensus rating. On TipRanks, the average Walt Disney price target of $106.52 implies 14.9% upside potential from current levels. Year-to-date, DIS stock is up 4.2%.
