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Disney Shares Fall On Mixed Quarter Amid Hulu & Succession Overhang; Wall Street Analysts Say Stock Undervalued

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Disney is the DJIA’s worst performer today with shares down over 8% after reporting fiscal second quarter earnings that were mixed and a bit messy as the company and industry reset.

Wall Street analysts trimmed some estimates today but were largely supportive, expressing confidence in the media giant’s ability under CEO Bob Iger to work through key issues. “Despite all the massive investments and losses in DTC and the continuing collapse of linear networks, the long-term profit picture should be brighter than the market knows and thus we think the stock is undervalued,” said MoffettNathanson in a note today. “The issue for Disney’s stock, at this point in time, is that there is no map or GPS to get us to that special place.” The firm has an “outperform” rating and a $127 price target on the stock, which is trading at just under $93 midday.

Disney lost some streaming subscribers last quarter, but narrowed DTC losses. Parks, especially internationally, are rebounding although consumer products aren’t.

Linear television continues to decline, the cost of sports rights to rise. Iger indicated that the best resolution for Hulu would be Disney buying out Comcast — an expensive proposition. “As the Hulu negotiations with Comcast are still looming, we believe it would be unwise for Disney to start talking up 2025 streaming profitability ahead of that closure.

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