They say the first step is to admit you have a problem. Entertainment giant Disney (NYSE:DIS) did just that, thanks to CEO Bob Iger, who got up and revealed that Disney movies of late have been too focused on “messaging” and not enough on “quality storytelling.” That admission may have made some points with investors, as Disney is up fractionally in Thursday afternoon’s trading.
Iger, at the DealBook Summit in New York yesterday, revealed that Disney movies of late had indeed been too focused on messaging. Further, Iger also revealed that such a stance would no longer be tolerated. He noted: “Creators lost sight of what their number one objective needed to be. We have to entertain first. It’s not about messages.”
Thus, not only is Iger putting out the call for improved storytelling, but he’s backing it up by dialing back on the total number of Disney releases to come in 2024. With fewer films going out, the company can better focus on making them better; spending more time with a project like that does improve the odds that it will come out better than something that’s been rushed to fit an artificial timetable.
Taking on Internal Dissent
Iger’s sweeping changes come at a difficult time for Disney in general. With activist investors like Trian Fund Management looking to land seats on the board, Disney named two new members to the board as it was, to possibly fend off the Trian advance. Disney brought in former CEO of Sky Jeremy Darroch and former Morgan Stanley head James Gorman. With Disney seeing its worst year since 2014—2023 is the first year where Disney hasn’t had a billion-dollar movie since 2014—it’s little surprise that proxy fights and board battles are gearing up. Iger’s changes here may help fend off some of those troubles, but it may be too little too late to prevent a scouring of the board.
Is Disney Stock a Buy or a Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DIS stock based on 18 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 6.01% loss in its share price over the past year, the average DIS price target of $106.52 per share implies 15.09% upside potential.