Down 12% since our high conviction call, Disney is one of the weakest on the list due a quarterly earnings result that underwhelmed while they have also just announced a ‘back to the future’ moment with the reinstatement of Bob Iger as CEO to replace his hand-picked successor Bob Chapek. We view this as positive and should drive a content-led turnaround, however, patience will be required here. Hindsight suggests that Disney would have been better off (near term at least) simply licensing their content for other streaming services, however, they made the decision to launch their own to extract the most value possible from their catalogue. This ‘should’ yield better returns over time however in the near term, it is proving costly. Short-term pain for long-term gain is the strategy at Disney. While we will give this position some room, we are not advocating aggressive buying following their weaker than expected update.
MM is now more neutral on DIS US
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