Why is Disney Stock so Cheap?

The other Bob’s back at Disney – here’s what to watch for.

Andrew Willis 2 December, 2022 | 4:58AM
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Andrew Willis: After hearing that Disney (DIS) was reinstating Bob Iger as CEO, it all made sense when I learned that he had emphasized the important role of streaming at Disney. After all, we expect this segment to grow from 120 million subscribers in 2020 to 300 million by 2026, giving the likes of Netflix (NFLX) and Apple (AAPL) a run for their money.

The market seems to have realized the potential of the company focusing on streaming strategies, with the stock rallying in the wake of the announcement of the Bob swap. But after Bob Chapek’s reorganization and preparation for the evolving media landscape, we think the stock still has some ways to go to reach its fair value estimate.

Having to transform from video cassettes and DVDs to the very fast-moving world of streaming requires streamlined decision-making processes, and Chapek helped line that up. Now, Iger can use his relationships to strengthen the “softer” side of the business, as senior equity analyst Neil Macker notes, which includes Hollywood stars – and perhaps most importantly, investors.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Apple Inc176.55 USD0.86Rating
Dominion Energy Inc48.91 USD-0.22Rating
Netflix Inc622.83 USD-0.95Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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