Walt Disney Co. (DIS) is being investigated by the U.S. government over its diversity practices.
The head of the Federal Communications Commission (FCC) in Washington, D.C. has announced that he is opening an investigation into the diversity practices of Disney and its ABC television network , saying they may violate U.S. employment regulations.
FCC Chair Brendan Carr wrote to Disney CEO Robert Iger, saying that the company’s diversity, equity and inclusion efforts may not comply with FCC regulations and that changes by the company may not go far enough. Carr added that he sent similar letters to Comcast (CMCSA) and Verizon (VZ) concerning similar diversity probes.
Diversity vs. Discrimination
In the letter sent to Disney CEO Bob Iger, Carr said, “I want to ensure that Disney ends any and all discriminatory initiatives in substance, not just name.” The administration of U.S. President Donald Trump has targeted diversity, equity and inclusion, so called “DEI” initiatives, claiming that they amount to a form of discrimination and do not lead to the most qualified people being hired for various jobs.
Disney has caused controversy with diversity in some of its recent films. The Mouse House came under fire for casting Rachel Zegler, a Latina actress, in a live action version of the movie “Snow White and the Seven Dwarfs,” among other controversies. DIS stock is down 19% over the last 12 months.
Is DIS Stock a Buy?
The stock of Walt Disney Co. has a consensus Strong Buy rating among 21 Wall Street analysts. That rating is based on 16 Buy and five Hold recommendations issued in the last three months. The average DIS price target of $129.74 implies 32.31% upside from current levels.
