Bob Iger’s time is running out.

The former Walt Disney (DIS) CEO who thought he’d spend a pleasant retirement writing books and possibly pursuing political ambitions has returned to the leadership of the media behemoth.

There’s a lot to repair at the corporation, and it’s easy to wonder if he’ll be able to complete it all in the two years he’s set aside before stepping down again.

I’ll cut to the chase: I believe Iger will still be CEO in three years. Allow me to make an even more audacious financial prediction: Disney stock will more than double in three years.

The shares are nearly half of where they were two years ago, so let’s look at why I believe the House of Mouse can reach new highs by early 2026.

What will the Future Bring?

Let us assume what many market observers believe to be clear right now.

The global economy will worsen before it improves, which will be devastating to Disney as a consumer-facing colossus. Advertisers’ marketing spending for the company’s TV and streaming operations would be reduced.

The renowned theme parks segment, which broke new records in fiscal 2022, will face competition.

The systematic fall in box office receipts that has been occurring for the past two decades will continue.

Fortunately, the horizon is more visible than the pothole-infested road ahead.

Let us begin with Disney’s media and entertainment distribution division.

Revenue increased by 8% in fiscal 2022, thanks to a 20% increase in its premium streaming business, which offset flat results at its legacy linear networks.

Streaming Wars

Together with Hulu and ESPN+, Disney+ now accounts for about a quarter of the company’s overall revenue.

The sticking point here is that the direct-to-consumer streaming company ran a more than $4 billion operational deficit in the previous fiscal year.

The red ink at Disney+ is the primary reason Iger is still here and
fired CEO Bob Chapek is not.

When Disney+ began three years ago, the goal was for the platform to be profitable by the end of fiscal 2024. It didn’t seem likely with losses widening.

As Iger’s principal goal, you have to like his odds of getting the streaming balance right. It may not happen in two years, but we could be there in three.

A recent price increase and the inclusion of an ad-supported tier should aid Disney+’s aim to boost the media conglomerate’s bottom line rather than deduct from it by early 2026.

When consumers start spending again, ads will inevitably return to the market, and Disney’s unrivaled content inventory and brands will continue to make it a desirable market for advertisers to access.

Despite Avatar: The Way of Water becoming the first picture since 2019 to surpass $2 billion in worldwide ticket sales, Disney and its colleagues will continue to face challenges in theatrical distribution.

The good news is that the corporation already has robust and well-established streaming channels, which will help to compensate for any weaknesses at the local multiplex.

Revenge Tourism

In terms of Disney’s theme parks, the section has saved it in the last year as “revenge tourism” has become popular.

People paid a premium to return to the world’s top theme park operator after canceling vacation plans in 2020 and, at the very least, globally in 2021. If there isn’t a gentle landing to the rising economic pressures, turnstile clicks will decrease this year, if not next year, but Disney’s walled attractions always bounce back.

The theme parks will have an exciting year in 2025, when its main competitor in Florida, Universal Orlando, opens Epic Universe. If Disney does not want to lose market share at its largest resort, it must respond.

Iger hasn’t talked much about the future of Disney’s theme park business, but if he truly wants to cement his legacy – and be able to stay away for good this time – it will have to be about more than just turning around Disney+.

It’s too late for Disney to create a new park in Florida to compete with Epic Universe when it opens, but plans will almost certainly be in place by then to keep fans and shareholders nearby.

Disney remains the media industry’s class act. Trailing revenue has already surpassed the pre-pandemic high of fiscal 2019. Analysts predict that adjusted earnings will reach the all-time high of $7.08 per share set in fiscal 2018 by fiscal 2026.

If Iger is mostly successful this time, getting the price back above $200 in three years seems more than reasonable.

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