A Wells Fargo analyst recommends that The Walt Disney Company exit the streaming business to refocus on its core strengths [1].
This proposal suggests a fundamental shift in how the entertainment giant distributes its intellectual property. By moving away from the costly infrastructure of direct-to-consumer streaming, the company could potentially unlock significant market value by returning to a pre-streaming model centered on content creation, licensing, and theme park experiences [2].
Steven Cahill, an analyst at Wells Fargo, said this strategic pivot could result in a stock uplift of approximately 40% [1]. The shift would prioritize the monetization of Disney's intellectual property through third-party licensing rather than maintaining the overhead of its own platforms [3].
This recommendation comes as Wells Fargo reports its own strong financial performance for the second quarter of 2026. The firm reported earnings per share of $2.00 [4] and total revenue of $22.62 billion [4].
Growth in the firm's financial services sector has been notable this year. Wells Fargo's investment banking fees reached $939 million in the second quarter of 2026 [5]. This represents a 35% increase year-over-year [5].
While the analyst's report focuses on the potential upside for Disney, it highlights the ongoing struggle streaming services face regarding profitability. By refocusing on experiences and licensing, Disney would leverage its existing assets without the volatility associated with subscriber growth and digital churn [2].
“Disney could unlock 40% upside by returning to its pre-streaming model”
The recommendation reflects a growing skepticism among financial analysts regarding the 'streaming wars' and the sustainability of high-cost digital platforms. If Disney were to pivot back to a licensing model, it would signal a broader industry trend toward prioritizing high-margin content sales over the pursuit of direct subscriber ownership.
