Disney Edges Lower After Hours as Wall Street Debates Streaming Strategy vs. IP Value
Disney (DIS) slipped 1.29% after hours as Wells Fargo argued the company should exit streaming and focus on content, saying the stock could jump 40%. Meanwhile, "The Mandalorian & Grogu" hit digital platforms after a disappointing box office run.
Disney (DIS) is facing a heated debate on Wall Street over its streaming strategy ahead of earnings. Wells Fargo is urging the company to exit the streaming business and focus on content production, arguing such a move could send the stock up 40%. At the same time, the Star Wars spinoff The Mandalorian & Grogu landed on digital streaming platforms today after a disappointing box office run. As of 4:00 PM ET on July 20, Disney shares were at $96.41, down 1.29% from the prior close.
- Wells Fargo maintained its "Overweight" rating on Disney but cut its price target from $146 to $125. Even at the new target, the stock has roughly 31% upside from last Friday's close. If Disney exits streaming entirely, the bank says shares could rally another 40%.[Stocktwits]
- Wells Fargo believes Disney can't compete with Netflix or YouTube on content scale and release cadence in streaming. Its IP value is rising, but its distribution business is falling behind.[Stocktwits]
- The Mandalorian & Grogu hit digital streaming platforms today (July 21) after grossing $342.2 million globally — the lowest opening for any Disney-era Star Wars film.[Forbes]
- On Stocktwits, retail sentiment on Disney remains "bullish." Among the 30 analysts covering the stock, 27 rate it a "Buy" or "Strong Buy," with a 12-month average price target of $129.67.[Stocktwits]
- Disney shares are down roughly 15% year to date.[Stocktwits]
As of 4:00 PM ET on July 20, Disney (DIS) shares were trading at $96.41 in after-hours action, down 1.29% (-$1.26) from the prior close of $97.67. During the regular session, the stock hit a high of $98.385, opened at $97.85, and touched a low of $96. The previous trading day (July 17), shares had rallied nearly 2% after Wells Fargo released a report urging the company to exit streaming.[Stocktwits] The modest after-hours dip likely reflects lingering uncertainty about Disney's streaming strategy heading into earnings season.
Wells Fargo: Exit Streaming, Focus on Content
In a July 13 report, Wells Fargo took a sharp stance on Disney's streaming strategy. The bank maintained its "Overweight" rating but cut its price target from $146 to $125. Even so, the new target still implies roughly 31% upside from last Friday's close. Wells Fargo went further, arguing that if Disney exited streaming entirely and pivoted to content production, the stock could rally another 40%.[Stocktwits]
"Disney cannot compete with Netflix or YouTube on content scale," the bank wrote. "Whether its release cadence can manage churn under long-term margins is an open question. But what's clear is that the value of its intellectual property is rising."[Stocktwits] Wells Fargo believes that even if Disney's content appears on rival platforms, its film, theme park, and brand strength would remain intact.
IP Value Accelerating, Outpacing Physical Assets
Wells Fargo's analysis is rooted in a broader trend: the value of intellectual property is accelerating. According to a July analysis by the UN's intellectual property agency, investment in intangible assets — including patents, trademarks, and other IP — grew at an annual rate of 5.5% between 2020 and 2025, compared to just 3.2% for tangible assets over the same period.[Stocktwits]
Wells Fargo argues that Disney's massive IP library — spanning Marvel, Star Wars, classic animation, and more — is rapidly gaining value, while its streaming distribution business lags. "We do not believe its box office, theme park experiences, or brand value would be affected if its content library appeared on rival global streaming platforms," the bank added.[Stocktwits]
The Mandalorian & Grogu Hits Streaming After Weak Box Office
Echoing the streaming strategy debate, Disney's Star Wars spinoff The Mandalorian & Grogu landed on digital streaming platforms today (July 21). Directed by Jon Favreau and starring Pedro Pascal, the film follows the Mandalorian and Grogu as they are recruited by the New Republic to rescue the Hutt Rotta and capture an Imperial warlord.[Forbes]
The film hit theaters on May 22, posting a North American opening weekend (four-day) of just $98 million — the lowest debut for any Star Wars film since Disney acquired Lucasfilm. The previous record was held by 2018's Solo: A Star Wars Story ($103 million). Worse, the film's second weekend saw a 70% drop.[Forbes]
As of July 17, the film's global gross stood at $342.2 million — $177.4 million domestically and $164.8 million overseas. Its production budget was $165 million (excluding marketing costs). Now in its ninth week of release, it is playing in just 90 North American theaters and is nearing the end of its theatrical run. The digital version is priced at $29.99 to buy or $24.99 to rent, with a 4K Ultra HD Blu-ray release set for August 25.[Forbes]
Market Sentiment and Analyst Consensus
On retail trading platform Stocktwits, user sentiment on Disney remained "bullish" as of July 13, with message volume at normal levels.[Stocktwits] Among analysts, data from Koyfin shows that of the 30 analysts covering Disney, 27 rate it a "Buy" or "Strong Buy," two rate it a "Hold," and one rates it a "Sell." The 12-month average price target is $129.67, implying roughly 36% upside from last Friday's close.[Stocktwits]
Still, Disney shares are down roughly 15% year to date, reflecting ongoing concerns about streaming profitability, theme park demand, and content output efficiency.[Stocktwits] With third-quarter earnings approaching, investors will be watching closely for updates on streaming subscriber growth, theme park performance, and returns on content investment.
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