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- JP Morgan analyst Philip Cusick reinstated Walt Disney Company (NYSE: DIS) with an Overweight and a $135 price target.
- While the analyst was cautious about the media landscape overall due to sustained streaming losses and advertising headwinds, Disney is his favorite name among the group.
- The company's potent asset mix and his expectations of a rapid decline in streaming losses in the next year won the analyst's conviction.
- CEO Bob Iger focused on the path to profitability in DTC. The analyst expected margins to improve as the company pared away what had become during COVID, a bloated cost structure in DMED.
- As expected, Iger has pushed back hard on a sale or spin of ESPN and is more focused on making all assets work.
- On the F1Q23 earnings call, CEO Bob Iger outlined a new transformation program centered on rationalizing the streaming business, a $5.5 billion cost-cutting program, and empowering creativity.
- The new organizational structure will include three core business segments: Disney Entertainment (legacy DMED less sports); ESPN; and Disney Parks, Experiences, and Products.
- Citigroup analyst Jason Bazinet maintained a Buy and lowered the price target from $145 to $130. Disney reported F1Q23 results above the Street.
- The company also introduced a $5.5 billion cost savings target, outlined a new corporate structure, and pointed to rationalizing its streaming business to put it on a path toward sustainable, profitable growth.
- The analyst updated his model to reflect 1Q23 performance and his latest outlook.
- Price Action: DIS shares traded lower by 0.8% at $107.20 on the last check Monday.
| Mar 2022 | MoffettNathanson | Maintains | Neutral | |
| Feb 2022 | Citigroup | Maintains | Buy | |
| Feb 2022 | JP Morgan | Maintains | Overweight |
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