The Walt Disney Company
The Disney Analyst
Yorkville Ives analyst Dan Ives reiterated an Outperform rating on Disney stock with a price target of $125.
The Analyst Takeaways
Reports say Disney is cutting thousands of jobs, a move that Ives says will make Disney leaner for its fiscal 2027 story.
"We view the latest round of cost actions as another clear sign that CEO Josh D'Amaro is reshaping Disney for its next chapter of growth, and we believe investors should look past the near-term headlines to the earnings power being unlocked underneath," Ives said in a new investor note.
Ives said the job cuts will be uneven, but could cover areas like theme parks, television networks and studios.
"This is less about shrinking the company and more about reallocating capital toward where the growth is," Ives said.
Ives expects the cost savings to be reinvested into growth areas like theme parks, ESPN and Disney+.
The cuts would also mark the largest since D'Amaro took over as CEO in March. The job cuts add to around 1,000 cuts in April, layoffs in July and about 300 in September.
"Disney has run this playbook successfully before, as the company raised its annual cost reduction target by $2 billion to $7.5 billion in 2023," Ives said.
Disney reports fourth-quarter financial results Tuesday, Nov. 17, before market open.
Ives said the quarterly results will reflect the live-action "Moana" film underperforming at the box office and a softer advertising environment. The analyst expects Disney's Experiences segment to perform well in the quarter.
Guidance for fiscal 2027 will be the "real focus" for the company and for analysts like Ives.
"We continue to believe Disney is in the early innings of proving that its franchises can reinforce one another across streaming, sports and parks, and a leaner cost base only makes that flywheel more profitable over the coming years," Ives added.
Disney Stock Price Action
Disney shares were up 0.25% at $117.51 at the time of publication Friday, versus a 52-week trading range of $92.19 to $120.80. The stock is up about 13% over the last month and 3.3% year to date.
