Bob Iger recently returned to The Walt Disney Company as CEO, replacing Bob Chapek.
©Reuters
The change in leadership has affected a lot, from other people leaving the company, to getting some updates on what’s going to happen in the future. Another major thing affected was Disney’s stock. We gave you an update when Iger’s return was first announced, and now, a couple weeks later, we’ve got another look at what’s happening with Disney stock.
When Iger was first announced as returning to the position of CEO of The Walt Disney Company, stock prices jumped up. They were at $91 per share on Friday, November 18th, and jumped to $97 on Monday, November 21st, the day after Iger’s return was announced. Since then, prices evened out a bit, but they are picking up.
As of December 5th, Disney’s stocks are nearing $100 per share — currently at over $99. It’s also important to note that prices have not dropped below $94 since Iger took over.
©Google Stocks
But, are stock values where they need to be for The Walt Disney Company? Disney shares are still trading around the same value that they were at the end of 2014, according to Yahoo Finance. And, bringing back a CEO that was generally received positively by the public doesn’t always help.
“The experience of other so-called ‘Boomerang CEOs’ shows that once-successful leaders might stumble the second time around, with one study finding that companies that bring back CEOs do worse than those that bring in someone new,” according to Fortune. And, a study published in the MIT Sloan Management Review in 2020 showed that companies that brought back a former CEO have “significantly lower” stock performance than those that put someone new in the position.
©CNBC
As for what analysts are saying, it’s a mixed bag. “Given Iger’s track record and experience at the company and industry, we believe this announcement will be well received by investors,” wrote Bank of America analyst Jessica Ehrlich in a note to clients, according to Yahoo Finance.
But, she went on to say “we now expect Iger to fully re-evaluate several of the recent strategic initiatives and corporate restructurings over the past two years, which could create some near-term uncertainty on direction of the company.”
©Alberto E. Rodriguez / Getty Images
Wall Street analysts and investors seemed to have welcomed Iger back as CEO of Disney, with MoffettNathanson analyst Michael Nathanson saying “Magic is back.” He also upgraded the rating from “market perform” to “outperform,” while raising his stock price target by $20 to $120, according to The Hollywood Reporter. Then, he went on to say “We applaud Disney’s board for the courage to make this change.”
Nathanson said that Iger’s “communications skills and his ability to stay focused and honestly optimistic in the face of structural challenges provided a constant ballast in the roughest of media waters. We believe investors will value the transparency and return Disney some of its long-lost magic with a stronger narrative driving the stock higher again.”
Bob Iger presenting a model of Shanghai Disneyland
Nathanson also spoke about some changes that could happen under Bob Iger, saying “We would hope and expect that Mr. Iger examines the investment plans at Disney+ and re-focuses their investment on areas of franchise strength and away from broader general entertainment content.”
Wells Fargo’s Steven Cahall wrote in a report that “While Chapek’s departure is not a surprise due to recent turmoil and the stock’s decline, Iger’s resurgence is a positive surprise,” according to The Hollywood Reporter.
He said that investors would see this change as a clear positive, and then wrote “While the announcement doesn’t solve all of Disney’s problems, we think investors will embrace it as it puts perhaps the best leader in media at the helm with a mandate to shake things up.”
Bob Iger ©Bloomberg
But, others feel differently. Doug Cruetz, media analyst at Cowen, told Yahoo Finance Live that “Disney’s problems are more structural than they are related to who’s running the company.” He went on to say “I don’t think there’s any magic wand that by Bob Iger can wave to change that.”
It seems like some analysts are happy about the change and hopeful for the future, while others are more concerned about significant changes that will need to be made in the near future to determine if this was actually a good decision by Disney.
Bob Iger ©New York Post
Iger is only supposed to be returning to the position for two years in order to try and find a new CEO for Disney. In this time, we would expect that some changes will be made to try and put Disney’s media division on a more positive course. The theme parks have recovered pretty well following the global pandemic, but media like movies and Disney+ still seem to be struggling.
For more on Bob Iger’s recent return as Disney CEO, check out:
- Disney Announces “Organizational and Operating Changes” As a Result of Bob Iger’s Return
- “They Brought This on Themselves” — Governor DeSantis Responds to Disney CEO Bob Iger’s Comments on Florida Legal Battles
- Will Bob Iger Reverse Bob Chapek’s Decisions?
- Disney CEO Bob Iger Comments on Reedy Creek and & Don’t Say Gay Controversy
- CEO Bob Iger Comments on Disney Park Pass Reservation System
Stay tuned to DFB for more Disney news and updates.
Every Major Change Since Bob Iger Returned as Disney’s CEO
Join the DFB Newsletter to get all the breaking news right in your inbox! Click here to Subscribe!
Are you happy about Bob Iger’s return? Tell us your thoughts in the comments.
Our handy (and portable!) ebook guides make sure you get the best deals and can plan a vacation of a lifetime.
The magic is back for the INVENTORSand not for the Disney park goers and the ones that stay in Disney resorts and don’t think that eiger is going to b any different he was part of the problem and still is he’s just back to make the investors and the stockholders. Happy Disney was Disney with the magic when Michael Eisner was there and u can bet that eiger is not listening r care about the people that go to Disney he was part of the problem still is
The experts may disagree that Iger can bring back the company the way to was before Chapek. Perhaps, but they’re are talking about stocks and share values. However, guest are only concerned with the parks and all the changes that were made during Chapek reign go terror. Park guest don’t really care about Disney’s stocks and the share value, they just want value at the parks. I think Iger can achieve that. He can’t do nothing about inflation and price increases, but he can restore most of the stuff that was taken away at the parks and hotels.