Analysts predict 38% Upside for DisneyDisney's shares fell this week to their lowest point in 2023, largely due to the SAG-AFTRA strike. Disney is sat right near the bottom of its 24 month range, and just 10% off its COVID driven March 2020 low of $79.
Despite the negative moves, experts predict that Disney's shares will rise to $120.53 in the next 12 months, a 38.25% gain on current prices. This is based on 18 analysts price targets for Disney in the last 3 months. The average price target is $120.53 with a high forecast of $147.00 and a low forecast of $88.00.
Disney, along with its sports channel ESPN, are looking at deals with some of the biggest sports leagues in the US; the NBA, NFL, and MLB. Disney and Warner Bros. Discovery have special rights to negotiate with the NBA, which will end in 2024.
Strangely though, Bob Iger, the boss of Disney, hinted that they might sell part of ESPN, which it currently owns 80% of.
Disney is moving from cable to live sports as more people are cutting their cable subscriptions. It's unclear what Disney's competitors think about this change, especially if the sports leagues buy a part of ESPN.
There are potential headwinds ahead though.. A strike from a group called SAG-AFTRA and a decrease in spending by Netflix in 2023 might cause Disney's costs to rise. This could cause delays in releasing new movies and TV shows, which could lower Disney's earnings.
Disney recently said that Iger will stay as the CEO until 2026. This news was well-received, but Iger's earnings caused some fuss. He could see earnings above $27 million this year, 535 times more than the average pay Disney employee.
Despite making so much money, Iger has faced criticism for his comments about the striking writers and actors, with some people calling him out of touch.
Disney's problems go beyond just PR. The company has issues with planning for the future and dealing with its structure. They’re currently looking for a new Chief Financial Officer to replace Christine McCarthy, whose tenure lasted over 23 years.
All this is happening when people are questioning why CEOs earn so much more than their employees, a big topic in the fight against income inequality.
However, this negative sentiment should prove to be temporary. I believe Disney stock is headed higher in both the short and medium term and the March 2020 low should hold, making this an attractive entry point.
