Investors were not happy when news came out of Disney (NYSE:DIS) about what might be happening to the range of linear television channels it still owns. Even as linear television suffers, the proposed cure might be worse than the disease. And investors made their feelings known, selling off Disney stock and sending it down over 3% in Friday afternoon’s trading.
The trouble started when Bob Iger, during the Allen & Co. conference, noted that Disney would be “expansive” and “open-minded and objective” about the role that linear television networks would play in its future. That led to rampant speculation about potential sales to give Disney extra cash and a focus on its streaming and parks operations. Yet, another new suggestion came up recently, as Disney might end up parking that slew of channels in a project that it owns with Hearst Communications: A&E Networks.
Disney derives plenty of revenue from its linear TV operations. While they’re certainly down—revenue fell 9.1% in the last quarter—they’re still pulling plenty of cash, as that downed revenue figure came in at $2.62 billion.
Is Disney Stock a Buy or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DIS stock based on 18 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average DIS price target of $106.48 per share implies 21.86% upside potential.
