Who’s Been Buying Disney Stock as Analysts Flag 2023 Upside?

Walt Disney (DIS:US) shares could eventually rally more than 40% next year, according to Wells Fargo analysts. 

Despite a year-to-date (YTD) underperformance in Disney stock (-44% vs -20% in S&P 500), Wells Fargo analysts remain positive on the stock for 2023. They reiterated an Overweight rating and a $125 per share price target, which indicates an upside potential of about 45% relative to stock’s closing price on Monday.

Among other initiatives that could help DIS stock to re-rate higher in 2023, analysts are calling for new CEO Bob Iger to spin off ESPN and ABC.

“Recall that Iger built DIS into what it is today: a franchise IP leader with global scale. ESPN, traditionally the cash cow, is neither owned-IP nor global the way the rest of DIS is. With linear and sports trends diverging from core IP, we think severing the company is increasingly logical,” they said.

This is not the first-time investors and analysts are calling for Disney to spin ESPN off. Activist investor Dan Loeb urged Disney, in which he holds a stake, to spin its media and sports business into a new company. However, Loeb then reversed his course.

Disney spinning ESPN off could unlock new value and attract more investors to Disney, which could then fully focus on its long-term IP (intellectual property) strategy. It could also attract some investors that aren’t fans of Disney at the moment as they believe the ESPN business is struggling to fully monetize its live sports content.

Among US Politicians who were buying Disney stock in 2022, one highlighted candidate was Rep. Michael Burgess of Congress trading stocks in DIS as he invested between $15,000 - $50,000 on November 16, when shares closed at $93.95 a share.

Additionally, Congressman Ro Khanna has been actively buying Disney stock over the course of 2022, mostly at prices that exceed $100 per share.