Disney Is Off to a Decent Start As Iger Is Already Reapplying His Stamp

Disney reported a decent start to both fiscal 2023 and CEO Bob Iger’s second stint in office as parks continued to post strong results and streaming losses moderated. As expected, Iger announced a substantial cost reduction plan with savings of $2.5 billion in noncontent costs, including roughly 7,000 job cuts, and a $3 billion reduction in nonsports content spending. Attached to this plan is yet another restructuring as Iger will dismantle former CEO Bob Chapek’s centralized media division to return more creative and financial control to creative division heads. As a result, the firm will have three segments—entertainment; ESPN; and parks, experiences, and products. The parks division will be the same as currently structured while ESPN will be run as a separate segment for the first time. Iger made certain to point out that the separation of ESPN does not indicate a potential spinout or sale. We are maintaining our $155 fair value estimate.