An analyst from Macquarie, Tim Nollen, has maintained a neutral rating on Disney, while lowering its price target from $94 to $91. This comes amidst the launch of ESPN’s direct-to-consumer (DTC) streaming platform in August 2025. Nollen acknowledges both potential positives and negatives for Disney in this new venture.
While the launch of ESPN’s DTC platform could pose challenges, Nollen believes the new NBA rights deal and expanded NCAA Football playoffs could help offset potential revenue decline. He highlights the accelerated cord-cutting trend, which could significantly impact ESPN’s earnings. He estimates that the industry’s year-over-year subscriber decline of 8.5% could double by 2027.
The analyst focuses on the key question: can Disney attract new subscribers to the ESPN DTC platform, or will it primarily be current viewers shifting from paying affiliate fees to the new platform?
Nollen views the new NBA rights deal as a positive for Disney’s sports segment, highlighting the 73% increase in average annual price and the inclusion of international rights and streaming on the new ESPN DTC platform. The expansion of the NCAA Football playoffs also adds another source of revenue. Nollen expects this to generate an additional $175 million in revenue in fiscal year 2025 and $400 million in fiscal year 2026.
Despite the challenges, Nollen remains optimistic about Disney’s long-term prospects, believing the company is leading the way in the media industry’s transition to streaming. However, he acknowledges the uncertainty and change ahead.
Disney’s stock closed at $94.52 on Thursday, representing a 1% increase for the day. The stock has seen a 4% increase year-to-date in 2024.
