Here’s Why Daniel Ives Believes Walt Disney Co (DIS) Deal with Fox Is the Exact Right Move at the Right Time
GBH Insights' Daniel Ives anticipates that with the Fox takeover in Disney's "back pocket," the House of Mouse will be poised to capture market/mind share against its competitors.
Walt Disney Co (NYSE:DIS) very well could be shaking hands with Fox tomorrow, CEO of the House of Mouse Bob Iger is under the Street’s microscope as to how the company can use the momentum from this “game changing” $60 billion plus media deal.
GBH Insights analyst Daniel Ives calls this “a home run deal for Disney,” even with the acquisition notably an “aggressive” one that comes at a steep price. It’s a smart play by the House of Mouse, sharpening Disney’s content and streaming edge against Netflix. Praising this a beautiful syndication of resources, Ives commends the Disney streaming machine’s deal and all of its resultant momentum.
Ahead of tomorrow’s likely announcement, the analyst asserts: “in our opinion this is the right move at the right time as the marriage of these assets creates a much more formidable Disney on both the content and streaming front for the coming years with its primary goal to invade Netflix’s ‘golden streaming sandbox’ when it launches its competitive service in 2019. There are clearly vast synergies around the box office/advertising by combining Fox’s movie and television studio […] with Disney’s vast entertainment assets that would give the combined media behemoth 35%-40% of domestic box office market share, while we also estimate there are roughly $2 billion of cost synergies that could be realized in the first 12 to 18 months of the deal as Disney finds overlap on the studio front. With the sale of many of Fox’s entertainment assets including its movie studios, Nat Geo, and importantly its stakes in Sky and Hulu to Disney, we believe this would create a much more content rich competitor in Disney on the streaming front.”
TipRanks shows a toss-up on Wall Street when it comes to the entertainment king’s prospects in the market. Out of 16 analysts polled in the last 3 months, 6 are bullish on Disney stock, 7 remain sidelined, while 3 are bearish on the stock. Is the stock overvalued or undervalued? Notably, the 12-month average price target stands at $107.62, aligning with where the stock is currently trading.