Walt Disney
stock was rising Wednesday on a report that activist investment firm ValueAct Capital has built a stake in the entertainment company.
ValueAct has taken a “significant” stake in
Disney
(ticker: DIS), according to a report from CNBC’s Activist Spotlight. The details of the investment currently aren’t publicly available.
Neither ValueAct nor
Disney
responded to requests for comment from Barron’s.
Shares of Disney were rising 3.5% to $94.24. The stock was the best performer in the
Dow Jones Industrial Average
on Wednesday.
Disney investors have wanted change at the company as it struggles with fewer people viewing linear TV and instead turning to highly competitive and costly streaming services. Disney previously has stated that it was open to the possibility of selling certain TV assets, and The Wall Street Journal has reported the company is exploring the potential of putting some of its smaller TV networks into its joint venture with Hearst.
Disney films also continue to disappoint at the box office. ValueAct, which has investments in other media companies like
Spotify
(SPOT) and
New York Times
(NYT), could bring along some expertise to help navigate the complicated modern media landscape.
Despite the difficult TV environment, Deutsche Bank analyst Bryan Kraft wrote in a research note Wednesday that he believes the company is on its way to more than offset “the declines in its linear entertainment network profit pool with profit growth in streaming.”
“While the Theme Parks have been the earnings growth juggernaut of Disney ever since 2022 and continue to be strong, it is DTC (aka streaming) that is raising prices, better managing costs, cracking down on account sharing, and leaning into CTV advertising more aggressively,” Kraft said. He lowered his price traget slightly on Wednesday to $115 from $120 but maintained his Buy rating on the stock.
Activist Spotlight reported that ValueAct believes Disney’s theme parks and consumer products businesses are alone worth around $80 a share. The value was boosted by the recent $60 billion investment Disney plans over the next decade for its parks, experiences and products segment.
The report of ValueAct’s stake in Disney comes as Nelson Peltz’s investment firm Trian Fund Management looks to gain seats on the company’s board.
Write to Angela Palumbo at [email protected]
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