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Stock Analyst Update

Surprising Timing as Disney's Iger Steps Down

We believe new CEO Chapek will continue to run the Iger playbook at least over the near term, and we are maintaining our wide moat rating and fair value estimate.


On Feb. 25, Disney (DIS) announced that the board named Bob Chapek as chief executive officer, effective immediately. Former CEO and chairman Bob Iger will serve as executive chairman and direct the firm’s “creative endeavors.” Iger will also help with the CEO transition until his contract ends on Dec. 31, 2021. While we expected Iger’s long run at the helm to end in the near future, we are surprised by the timing of the announcement. We had expected that the board would let the competition between Chapek, formerly the head of the parks and consumer products division, and Kevin Mayer, head of the direct-to-consumer and international segment, play out through at least the end of 2020. Despite the timing surprise, we believe that Chapek will continue to run the Iger playbook at least over the near term as Iger focuses on the creative direction of Disney. We are maintaining our wide moat rating and $141 fair value estimate.

Iger’s term as CEO has been extended three times over the last decade as the firm has added assets and the board lost confidence in a previous heir apparent. The most recent extension in December 2017 was due to the pending purchase of the Fox entertainment assets and the launch of Disney+ in 2019. Iger cited both the completion of the Fox deal and the successful launch of Disney+ as the reasons for the timing of the CEO announcement. We think that Iger has had little interest in running the day-to-day operations and more on the long-term creative direction of the firm for a few years. Theoretically, the elevation of Chapek to CEO takes the day-to-day hassles off of Iger’s plate while allowing Chapek more time to settle into his role. However, Iger remains an iconic media mogul, and his ongoing presence at Disney over the next 20 months could overshadow Chapek.

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Neil Macker does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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