The question of who will succeed Bob Iger as The Walt Disney Company’s (DIS) CEO continues to be an important issue for institutional investors. As the media conglomerate faces leadership uncertainty, succession planning has taken center stage. Given the complexity of the company’s current challenges, investors and stakeholders are keenly focused on who will lead Disney next.
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Disney Extends Iger’s Tenure to Strengthen Succession Efforts
Bob Iger, who returned as CEO in November 2022 with a two-year commitment, extended his term through 2026 by July 2023. This extension allows Disney more time to find a suitable successor.
In an effort to address this important task, Disney recently appointed board member and former Morgan Stanley CEO James Gorman to lead its succession planning committee. This move signals the company’s commitment to a thorough and strategic selection process.
Goldman Sachs Analyst Highlights the Succession Issue
Transitioning from the internal preparations, Goldman Sachs analyst Michael Ng emphasized the importance of finding a successor for Iger during the Goldman Sachs Communacopia and Technology Conference while speaking to Yahoo Finance. Ng explained that leadership decisions directly influence the company’s strategy.
Disney Leverages Its Internal Talent Pool in CEO Search
Despite the urgency of the matter, Ng remained optimistic about Disney’s succession planning process, noting that Disney has a strong pool of talented executives across its various business segments, including theme parks, film and TV studios, and ESPN.
This internal talent gives Disney an advantage, as these leaders are already familiar with the company’s culture and strategic direction.
Disney Is Considering Four Internal Candidates for CEO
Shifting the focus to the potential candidates, the Yahoo Finance report indicated that four internal candidates are currently under consideration for the top role. This includes Dana Walden and Alan Bergman, co-heads of the entertainment division, Josh D’Amaro, head of the parks business, and ESPN chairman Jimmy Pitaro.
While Walden is viewed as a front-runner for the role, the decision is far from finalized. Moreover, the company might still opt for an external candidate to bring a fresh perspective to its leadership.
Disney Faces Growing Challenges
As Disney searches for Iger’s successor, it faces growing business challenges. These challenges include the industry’s shift away from linear television, struggles at the box office, and fundamental changes at ESPN.
Additionally, Disney’s parks business has shown signs of slowing down due to waning demand. These obstacles underscore the importance of finding a leader who can navigate these turbulent waters effectively.
Goldman Sachs Analyst Remains Bullish About DIS
Despite these challenges, analyst Ng remains optimistic about Disney’s long-term prospects. He cites the company’s potential to thrive in the competitive streaming landscape and its strong portfolio of sports rights, which are secured through the end of the decade, as key advantages.
This positive outlook provides a counterbalance to the uncertainties surrounding the leadership transition.
What Is the Target Price for DIS Stock?
Analysts remain bullish about DIS stock, with a Strong Buy consensus rating based on 19 Buys and four Holds. Over the past year, DIS has increased by more than 7%, and the average DIS price target of $118.53 implies an upside potential of 34.1% from current levels.
