Wells Fargo: Disney Could Jump 40% If It Exits Streaming

Wells Fargo analysts raised their price target on Disney (DIS) by 40%, arguing the company could unlock more value by focusing on content creation instead of competing in the streaming wars. The stock rose nearly 2% following the report.

Rating Change

Wells Fargo upgraded Disney from Neutral to Overweight, increasing the price target from $110 to $155, implying a 40% upside from the previous close.

Analyst Rationale

Analysts believe Disney can unlock greater value by exiting the direct-to-consumer streaming business (e.g., Disney+) and returning to its core content production model. They argue that a "content-first" strategy would improve margins and reduce operating losses in the streaming segment.

Context

The upgrade comes after Disney reported widening losses in its streaming unit last quarter, raising investor concerns. In contrast, other analysts like Goldman Sachs remain cautious, noting that a strategic shift could take time. Disney shares rose about 2% in today's trading.

What to Make of It

Wells Fargo's upgrade reflects growing optimism about a potential restructuring of Disney's business, but investors should monitor streaming profitability metrics before making any decisions.