Why Disney Stock Is the Real Winner from the Warner Takeover Battle

The Partners statue, in front of Cinderella Castle at Walt Disney World. (Walt Disney World Resort via Getty Images)

Key Points

• MoffettNathanson analyst Robert Fishman believes Disney is well-positioned to strengthen its streaming services amid the Warner Bros. Discovery bidding war.
• Analysts project Disney’s streaming segment operating income to increase to $4.4 billion by fiscal year 2028, from $1.3 billion in fiscal year 2025.
• Disney’s acquisition of Hulu and launch of an ESPN streaming app are expected to enhance international growth and technological advancements.

Forget Netflix and Paramount Skydance —it’s Walt Disney that may end up being the winner from the Warner Bros. Discovery bidding war, even though the House of Mouse has opted to sit this one out.

That’s the “clear consensus” in Hollywood, MoffettNathanson analyst Robert Fishman said on Tuesday, while recapping a recent trip to meet with media executives in Los Angeles.

“While the other competitors fight over the assets followed by regulatory approval distractions, Disney is in a prime position to make its streaming services stronger,” Fishman wrote. He rates Disney stock Buy, with a $140 price target that implies it can rally 24% from its level as of Tuesday’s close.

Disney makes more money from its theme parks than it does from streaming, but Wall Street sees the latter as the main way the company will grow its profits. Analysts polled by FactSet expect annual operating income for the streaming segment to rise to $4.4 billion by the fiscal year ending September 2028, up from $1.3 billion in fiscal 2025.

Created with Highcharts 9.0.1Walt DisneySource: FactSetAs of Dec. 26, 4 p.m. ET

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Disney finally took full control of the streaming service Hulu by buying out Comcast in June, and launched a live-sports ESPN streaming app in August. Those transactions should help the company “to build upon its international growth momentum and take the necessary strides to improve its technology,” Fishman wrote.

The analyst added that the continuing bidding war for Warner Bros., and with it beloved characters such as Harry Potter and Superman, “highlights the true value of premium intellectual property.” That’s something Disney has in spades, as it owns powerhouse franchises including Star Wars, the Pixar animated films, and the Marvel Cinematic Universe.

Disney’s stock could certainly do with a boost: Shares have been pretty much flat for the past decade, amid concerns about subscriber losses at ESPN and box-office weakness.

The company is expected to announce CEO Bob Iger’s successor in early 2026. Judging by the noise coming out of Hollywood, whoever ends up in the hot seat ought to be relieved not to be caught up in the Warner takeover battle.

Write to George Glover at george.glover@dowjones.com