Preview of Disney’s Town Hall: Expectations of Bob Iger by Wall Street

Looking a year ahead, certain positive changes have occurred for Disney under Iger’s leadership, including a focus on cost-cutting, leading to anticipated cost reductions of approximately $7.5 billion, higher than the initially targeted $5.5 billion. This restructuring has aimed to streamline and optimize Disney’s operations.

Despite these efforts, Disney’s stock price has faced ongoing pressure, closing the pre-Thanksgiving session at $95.07, below its level from a year ago. Investors and analysts are seeking further clarity on Iger’s forthcoming strategies for Disney.

Analyst Michael Nathanson from MoffettNathanson maintained a “buy” rating and a $115 stock price target for Disney in a Nov. 9 report, acknowledging the stock’s challenges over the past year. He highlighted the 19% underperformance compared to the S&P 500 since an upgrade following the news of Iger’s return to the company.

Activist investor Nelson Peltz’s Trian Fund, a major Disney shareholder, has increased its stake in Disney and hinted at a possible bid for board seats after previously abandoning a proxy battle in February. Similarly, ValueAct Capital, another activist investor, has acquired a significant stake in Disney and has engaged in discussions with the company’s management, as reported by CNBC.

In this context, Iger is preparing to address another staff town hall on Tuesday, Nov. 28, where observers anticipate new insights or guidance regarding the company’s future direction following the problem-solving phase.

In an earnings call, Iger outlined four strategic priorities: making Disney’s streaming business profitable, preparing ESPN for the digital future, enhancing the film studios’ output and economics, and expanding the live experiences business. Recently, Disney unveiled a $60 billion expansion plan for its theme parks, cruise lines, and other experiential offerings.

However, concerns persist. Analyst Jamie Lumley from Third Bridge cautioned about potential uncertainties within Disney due to an aggressive cost-cutting strategy that might impact the business going forward while attempting to make streaming profitable.

During the upcoming town hall, attention will be focused on possible updates or insights across various topics. Alongside Iger, notable figures like film unit head Alan Bergman, TV business leader Dana Walden, ESPN chair James Pitaro, and experiences head Josh D’Amaro will participate in the discussion.

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