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The battle for board seats at The Walt Disney Company ended Wednesday. The challenge was raised by billionaire Nelson Peltz and Blackwells Capital, which argued that Disney was performing poorly in streaming. In a multibillion-dollar battle, supporters of Disney CEO Bob Iger have emerged victorious.
Now that the votes have been cast, what’s next for Iger and the most magical place on Earth? In a research note published on Wednesday, analysts from MoffettNathanson discussed where the company is likely to go from here. They touched on the following points:
- Profit support for a streaming-centric future: Analysts note that Disney recently shared a target of double-digit profit margins for its streaming business. To achieve this goal, the company will focus on integrating Hulu, catching up with Netflix, and looking closely at Disney+’s distribution costs, they noted. MoffettNathanson estimates that Disney’s DTC division will generate more than $3 billion in revenue in 2026.
- creativity: Iger is looking to reignite the creative spirit that revitalized the iconic Disney brand earlier in his career, when the company acquired Marvel and Lucasfilm and turned them into long term TV and movie franchises. Analysts believe that empowering the company’s creative leadership with the ability to “greenlight projects” will ultimately lead to more profitable content, with a forecast of $100 million by 2026.
- Make the best use of old media: While Disney sees a place for traditional television in the future, analysts say, the company has also acknowledged the many challenges facing legacy media in an increasingly digital world. In addition to the joint sports streaming service that Disney is launching with Fox and Warner Bros. Discovery later this year, the company plans to launch its core ESPN offerings into a standalone streaming product next year.
- Investing in theme parks: Disney plans to invest more than $60 billion in its theme parks over the next 10 years, Moffett-Nathanson says, hoping to drive more growth for the physical entities that have become central to its brand’s success.
As of midday Thursday, Disney shares were trading at around $119 and remained relatively flat following the board news. The stock is up more than 31% this year, far outperforming the S&P 500.
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