Disney shareholders support exiting linear assets, says Wells Fargo

Wells Fargo analyst Steven Cahall keeps an Overweight rating on Disney (DIS) with a $110 price target after Bloomberg reported that Disney and Nexstar (NXST) have held early stage talks about Disney selling ABC to Nexstar. The analyst thinks Disney shareholders support exiting linear assets to focus on direct-to-consumer. Nexstar can also pay a reasonable multiple and improve its terminal growth rate, so at eight-times enterprise value to EBITDA “this deal works,” the analyst tells investors in a research note. Wells keeps an Equal Weight rating on Nexstar with a $175 price target