Wells Fargo proposes Disney exit streaming

Wells Fargo analysts outlined a scenario in which $DIS could boost its share value by roughly 40% by ceasing direct operation of streaming services and returning to a model based primarily on content production and licensing. This is not an announced plan by Disney management, but a strategic consideration by analyst Steven Cahall.

Disney currently competes mainly against subscription streaming platforms like Netflix, Max, and Prime Video through its services Disney+, Hulu, and ESPN. According to Wells Fargo, however, the company is not achieving the same scale or pace of new content releases in streaming as its biggest competitors. Its main advantage remains its established brands and extensive content library, which includes Marvel, Star Wars, Pixar, Disney Animation, and 20th Century studios.

The proposed model would mean Disney licensing its content more broadly to other distributors and streaming platforms, instead of funding its own technology infrastructure, marketing, and global distribution. Wells Fargo estimates that the company could generate more than $15 billion in annual licensing revenue by fiscal year 2028. According to the analysts, the change could lift earnings per share by about 10% to over $9.

The bank also lowered its price target for Disney shares from $146 to $125, citing the macroeconomic environment and adjustments to film production estimates. The stock currently trades around $96.

What is your view on this scenario? Do you hold Disney shares in your portfolio, or do you prefer its competitors?