Walt
Disney
shares were climbing early Thursday. Raising the prices for its streaming services was the most attention-grabbing announcement in its earnings but comments by CEO Bob Iger also focused minds on the prospect of spinning off or selling some of its assets.
Disney
(ticker: DIS) stock was up 1.7% in premarket trading at $89.00 after reporting mixed earnings for the July quarter. Shares were down 26% over the last 12 months through to Wednesday’s close.
The big question for Disney now is whether the company might be more valuable when broken up. CEO Bob Iger said on the earnings call that the company is considering strategic options for its linear TV channels.
Analysts have previously speculated about the possibility of Disney separating out ESPN and ABC. An ESPN spinoff now seems less likely as Iger has confirmed the plan is for the sports broadcaster to have a full direct-to-consumer offering. However, the future of ABC and other linear channels such as FX and National Geographic remains unclear.
“We think DIS holds great value, with distinct assets that may be recognized using strategic realignment and likely spinoffs,” CFRA analyst Kenneth Leon wrote in a research note after the company’s earnings report.
Leon kept a Buy rating on Disney stock but lowered his target price to $105 from $127. He noted that values the company at 12.9 times its estimated fiscal 2024 earnings before interest, tax, depreciation and amortization, compared with a peer group average of 11.1 times.
Write to Adam Clark at [email protected]
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