Disney Wins Analyst Conviction Courtesy Asset Mix, Streaming Loss Recovery As Bob Iger's Restructuring Kicks In - Walt Disney (NYSE:DIS)

JP Morgan analyst Philip Cusick reinstated Walt Disney Company 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.

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