Media giant Disney (NYSE: DIS) did not seem to have recovered in pre-market trading on Friday after the company hit a nine-year low on Thursday, closing at $82.47. Disney is in the midst of an extensive turnaround. This includes raising the prices of its streaming services, slashing costs, and increasing ads.
Back in July, Disney’s CEO, Bob Iger, had indicated that the media behemoth could divest portions of its television business, adopting an “open-minded and objective” stance on its future. He noted that some elements “may not be core to Disney,” but the company could retain its stronghold with ESPN.
Iger had indicated at that time that Disney was actively exploring “potential strategic partnerships” for the global sports leader, spanning distribution, technology, marketing, and content. This strategic shift indicates Disney’s readiness to reshape its television portfolio, reflecting the evolving landscape of media and entertainment.
According to a report in the Information, Amazon (AMZN) could be in initial discussions with Disney to pick up a minority stake in ESPN and could offer ESPN through one of Amazon’s streaming services.
However, the past few months have been a struggle for Disney as Hollywood writers and actors on strike have brought content production to a standstill. Attendance at the company’s theme parks has also been in decline. To make matters worse, entire state governments are fighting the firm. Even the company’s third-quarter results left investors disappointed as its Disney+ subscribers fell to 146.1 million due to rising competition.
Meanwhile, top-rated KeyBanc analyst Brandon Nispel told Marketwatch that Disney remains expensive in comparison to industry peers. Nispel highlighted the array of issues, stating, “Disney has problems across just about every one of its businesses.”
These concerns include a diminishing linear TV business, the intricate transition to streaming, an underperforming studios division, and a slowdown in the post-pandemic fervor for the parks segment. Disney’s multifaceted struggles underscore a complex period of transformation and adaptation. The analyst remains sidelined on the stock with a Hold rating.
Overall, analysts are cautiously optimistic about DIS stock, with a Moderate Buy consensus rating based on 13 Buys, five Holds, and two Sells.
