Walt Disney (NYSE:DIS) has received a $10 billion offer from Byron Allen, founder of Entertainment Studios, for its ABC TV and other networks, Bloomberg reported. Per the report, Allen has made a preliminary offer to acquire Disney’s ABC TV network, local stations, and the FX and National Geographic cable channels.
Allen estimates that ABC and other networks generated an EBITDA of about $1.25 billion in the trailing twelve months. Thus, he is valuing these assets at about eight times the EBITDA. If the EBITDA numbers appear to be different, his offer would change based on the multiple of eight.
In response, Walt Disney said it is open to considering numerous strategic options for its linear businesses. However, at present, the company has made no decision regarding the divestiture of ABC or any of its other properties.
Overall, Disney is exploring strategic alternatives for its linear businesses and focusing on driving profitability in its direct-to-consumer business through price increases and the ramp-up of the Disney+ ad tier. Moreover, on September 11, Disney and Charter Communications (NASDAQ:CHTR) reached a multi-year distribution agreement, ending their blackout fight. As the company is heading toward reaccelerating its growth, let’s look at what analysts recommend for Disney stock.
Is Disney Stock Expected to Rise?
Disney stock is down about 2.8% year-to-date, significantly underperforming the broader equity markets. However, analysts’ average price target of $110.53 implies 30.84% upside potential in its stock from current levels.
Further, with 14 Buy, five Hold, and two Sell recommendations, Disney commands a Moderate Buy consensus rating on TipRanks.