Analysts are largely bullish on Walt Disney stock ahead of the media company’s fiscal first-quarter earnings out Wednesday afternoon. Disney, which will report after market close, has gained 9.3% in the new year. That follows a period of steady underperformance, however, as the entertainment giant has lost more than 11% over the past 12 months. Shares were lower by 0.7% during midday trading amid news of a new sports streaming venture and a brewing battle with activist investor Blackwells Capital . Disney’s ESPN, Fox and Warner Bros. Discovery announced Tuesday that the three media giants are l aunching a streaming package of channels this fall that would aggregate the live sports content of each partner. But analysts are not sure about the effect of the move on Disney’s share price just yet. According to UBS, the combined affiliate rate of roughly $30 per month could mean a retail price in the range of $40 to $50 for consumers. “We see this move as defensive vs. Big Tech angling into future rights as media will now have both production and distribution. The financial value creation remains subject to many unknown variables including: pricing & tiers, rev sharing…costs/investments,” Wells Fargo analyst Steven Cahall wrote in a Tuesday note about the streaming venture. He holds an overweight rating on Disney, and his $115 price target reflects a 15.8% potential upside for the entertainment giant over the next year. Analysts are generally optimistic on Disney ahead of earnings, with some even thinking the stock is trading at a cheaper valuation than it should be. Disney remains Morgan Stanley’s sole overweight media stock given the firm’s bullish view on parks and streaming, analyst Benjamin Swinburne wrote in a Monday note. Swinburne’s $110 price target implies shares can gain 10.8%. His bull case for Disney’s share price is $135. “Signs of moderating cord cutting and ad sales declines along with steps towards rebundling are all potential drivers to improve sentiment in media,” Swinburne said in the note, adding that Disney’s current share price fails to reflect the value of its experiences business and media assets. He remains confident that Disney can achieve profitability in its direct-to-consumer business by the fiscal fourth quarter, but is eyeing the segment’s performance to understand its revenue and expense growth rate. Citi analyst Jason Bazinet thinks shares will rise, reaffirming his buy rating and $106 price target on the stock in a Feb. 1 note. That number suggests shares could gain 6.8% from Tuesday’s close. “We believe the primary focus will be on DTC profitability and the execution of company’s cost saving initiatives announced in F1Q23,” Bazinet wrote in the note to clients. In addition to having an eye on ESPN’s direct-to-consumer strategy, he said he expects to hear about Disney’s cost-saving initiatives, updates on its control of Hulu and Disney’s plans to sell the majority of its Indian media business, as well as any key priorities from the company’s new Chief Financial Officer Hugh Johnston. DIS 1Y mountain Disney stock. Investors will also be eyeing the effect of Disney’s surfacing board struggle. Activist investor Blackwells Capital on Tuesday urged shareholders to elect its three candidates to the company’s board of directors, saying they could help Disney “explore all strategic possibilities with cold eyes.” The nominees would suggest a potential split of Disney into three entities, possibly separating the media giant from its real estate properties, and also bring tech and AI-driven expertise to the board, Blackwells said. Disney is also contending with activist investor Nelson Peltz’s Trian Fund Management, which has been battling for board seats at the media juggernaut.
