TLDR
- Wells Fargo says Disney exiting streaming could add ~40% to its stock price
- Analyst Steven Cahall argues streaming has hurt shareholders, with DIS losing nearly half its value over five years while the S&P 500 gained 70%
- Wells Fargo lowered its price target to $125 from $146; stock closed at $95.62 Friday
- Disney could generate over $15B in annual licensing revenue if it focused on content over distribution
- Zacks upgraded DIS to Buy; consensus analyst rating sits at Moderate Buy with a $133.33 price target
Disney stock has been a rough ride for investors. Over the past five years, the stock has lost nearly half its value while the S&P 500 climbed more than 70%.
Now Wells Fargo Securities thinks it knows the fix — and it’s a big one.
Analyst Steven Cahall says Disney should exit the streaming business entirely. He estimates that move alone could add roughly 40% to the stock price.
DIS closed at $95.62 on Friday. The stock opened Monday at $95.64, giving it a market cap of around $166 billion.
Cahall’s argument is straightforward: streaming has been bad for shareholders. Disney, he says, isn’t built to compete with high-volume platforms like Netflix and YouTube. He questioned whether Disney’s release pace is enough to keep churn low over the long term.
Rather than running its own streaming service, Cahall says Disney should lean into what it does best — owning valuable IP. That means licensing out its Disney Animation, Pixar, Marvel, and Star Wars libraries instead of distributing them directly.
The Licensing Case
Wells Fargo estimates Disney could pull in more than $15 billion a year in licensing revenue if it pivots away from distribution. That would be a major step up from where it stood before launching Disney+ in 2019.
With Apple, Amazon, Netflix, YouTube, and Paramount Skydance all competing for top content, Cahall sees Disney’s library as increasingly valuable.
“We don’t think the box office, Experiences, or brand value would suffer if the library were on a competing global streamer,” the firm wrote.
Wells Fargo kept its overweight rating on DIS but cut its price target to $125 from $146.
Despite that cut, the broader analyst picture remains constructive. JPMorgan raised its target to $140 and rated the stock overweight. Rosenblatt maintained a buy with a $126 target. Wolfe Research set a $131 target. Raymond James trimmed its target to $111 but kept an outperform rating.
The consensus across 22 analysts sits at Moderate Buy, with an average price target of $133.33. One analyst has a Strong Buy, fifteen have Buy ratings, five have Hold, and one has a Sell.
Institutional Interest Picks Up
On the institutional side, LGT Fund Management raised its Disney position by 264.9% in Q1, ending the quarter with 22,738 shares worth around $2.19 million. Several other funds also added new or expanded positions.
Institutional investors collectively own 65.71% of the company’s stock.
Separately, Zacks upgraded DIS to Buy, citing improving earnings expectations. Disney’s last quarterly report, released May 6th, showed EPS of $1.57, beating estimates of $1.49. Revenue came in at $25.17 billion, up 6.5% year-over-year.
Disney has set FY2026 EPS guidance at $6.64, with analysts projecting $6.86 for the full year.
The company is set to report Q3 results next month.
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