Goldman Sachs analyst: Disney investors eagerly await CEO successor

Who will take over the CEO position at Disney (DIS) after Bob Iger remains a sensitive issue among institutional investors.

“When I talk to investors, succession planning is incredibly important because it determines the strategy of the company. And I think over the last few years before Mr. Iger returned to his current role, we may have seen some missteps particularly on the film and television studio side where there was some loss of market share,” Goldman Sachs analyst Michael Ng told Yahoo Finance on Tuesday at the Goldman Sachs Communacopia and Technology Conference.

Ng rates Disney stock as “Buy.”

Ng added: “One observation I would make is that they have an incredibly deep pool of talented executives in each of their business units, in the theme parks, in the film and television studios and of course at ESPN.”

Four internal candidates are reportedly being considered for the coveted position, which Iger held from 2005 to 2020 before returning in November 2022: entertainment co-chiefs Dana Walden and Alan Bergman, parks division head Josh D'Amaro and ESPN chairman Jimmy Pitaro. Walden is considered to have a slight edge, but that's far from certain.

The company could also decide to hire an external candidate.

“I think we will know this year, but [Bob Iger] has two and a half years left. So I wouldn't be surprised if it gets extended beyond this calendar year into next calendar year,” Kevin Mayer, close adviser and co-founder of Candle Media, told Yahoo Finance at the Cannes Lions Festival in mid-June.

The search for a CEO comes against a backdrop of more difficult operating conditions for Disney.

Disney (DIS) reported better-than-expected second-quarter results in early August, but complained that its theme park business slowed toward the end of the quarter. The company expects the slowdown to continue in the coming quarters.

“We're definitely seeing consumer behavior — I wouldn't necessarily call it a recession — being a little more careful with their money,” Hugh Johnston, Disney's chief financial officer, told me in Yahoo Finance's Morning Brief.

Revenue in the Experience segment, which includes the global theme park business, increased by 2% year-on-year. Operating profit decreased by 3%. Visitor numbers remained relatively unchanged year-on-year.

For the current quarter, Disney forecasts a mid-single-digit percentage decline in the segment's operating profit.

Disney shares have fallen about 14% over the past three months.

Despite the share price slide, Ng remains optimistic and points to several long-term positive aspects for the company.

The story continues

“There will be a short list of media companies that can run large streaming video businesses. I think Disney is probably one of them, along with a few other companies, namely Netflix (NFLX) and Amazon (AMZN) Prime,” Ng said.

“Another thing that I think puts Disney in a very good position for the long term is its portfolio of top sports rights, many of which are secured until the end of the decade.”

Three times a week I conduct insightful conversations with the biggest names in business and markets on Yahoo Finances Opening bid Podcast. You can find more episodes on our Video Hub. See on your preferred streaming serviceOr listen and subscribe Apple Podcasts, Spotifyor wherever you find your favorite podcasts.

In the following episode, “Opening Bid,” Larry Adam, Chief Investment Officer of Raymond James, explains his economic outlook for the rest of the year.

Brian Sozzi is editor-in-chief of Yahoo Finance. Follow Sozzi on X @BrianSozzi and further LinkedIn. Tips on deals, mergers, activist situations or other topics? Email [email protected].

Click here to get the latest technology news impacting the stock market

Read the latest financial and business news from Yahoo Finance