Disney Shares (NYSE: DIS) Drop 3.13% And Slips Further AH- What Happened?

NYSE: DIS – In latest share price news, Disney shares were down 0.49% in after hours trading, adding to the 3.13% slip seen in regular trading on Wednesday as news surrounding the boardroom battle came to a conclusion.

In a notable outcome for the entertainment giant, Disney effectively shut down an attempt by Nelson Peltz's Trian Partners to gain a seat on its board. The resulting 3.1% decline in DIS share price at the close of the market helped pull the DJIA into red territory, with the index finishing down 0.11% ending at 39,127.

This boardroom skirmish concluded at Disney's annual meeting, conducted virtually on April 3. Shareholder support ensured that all of Disney's nominated directors retained their positions on one-year terms. Despite a heavy push, Peltz secured just 31% of the vote in a fierce contest that cast a spotlight on the company's future direction and governance.

Trian released a statement after the decision was made, making it clear “while we are disappointed with the outcome of this proxy contest, Trian greatly appreciates all of the support and dialogue we have had with Disney stakeholders”. This coming from the group which holds more than $3.5bn DIS shares is important in understanding the next steps from Trian.

Furthermore, there was support in the recent trend in the statement with Trian stating “We are proud of the impact we have had in refocusing this Company on value creation and good governance. Since we re-engaged with the Company in late 2023, Disney has announced a host of new operating initiatives and capital improvement plans. The Board has been refreshed with two new directors. Over the last six months, Disney's stock is up approximately 50% and is the Dow Jones Industrial Average's best performer year-to-date.”

Peltz's initial involvement in Disney began early in 2023, following a period when he believed the company's shares were undervalued and the corporation was suffering from management issues. This belief led him to engage in two proxy fights with the media conglomerate, the second of which he has now lost as in the leadup to the meeting he was quoted as saying that the long-term track record “remains disappointing”.

However, despite this boardroom brawl, Disney's shares have, as eluded to by Trian, witnessed a remarkable rebound, surging 50% in the last 6 months to sit with a healthy market cap of $218.25B and takes the crown as the best performer on the DJIA.

This resurgence reflects investor confidence and a response to the company's strategic manoeuvres, and have the stock firmly back in positive territory since the return of Bob Iger 18 months ago. With competitors in the streaming space such as Netflix (NFLX) closing out the day 2.58% in the green, time will tell how Disney's respective business segments perform.

Analysts Expectations at DIS

As it stands, there are 26 analyst ratings on the board, with 22 ‘buy' ratings set against just the 1 ‘sell'. The remainder are in the ‘hold' category.

Analysts Disney price targets range from a low of $82, up to a high of $145, which you would have to assume might require some adjustment from the firms holding buy ratings with targets below the current mark of $118,40. The average forecast of $126.92 represents upside of just over 6.5% from the present level.

This recalibration of expectations comes at a pivotal juncture for the company, as stakeholders await a solid succession plan for CEO Bob Iger. Disney's management succession is at the forefront of investor considerations, with Iger's eventual departure inevitable, speculation mounts on the company's path forward.

The curtain has closed on the proxy fight, but the scene is set for Disney's next acts.