Disney may finally be turning the corner on what's been a difficult few years.
The company has seen its stock plummet over the last half decade, falling to below $80 per share late last month after it had hovered over $130 per share for most of 2019 and even peaked close to $200 per share in 2021.
But Disney DIS stock has gone up about 3% since its Q4 earnings call on Wednesday after Bob Iger said that the company has gone through major restructuring that has triggered "tremendous efficiencies" including cutting down about $7.5 billion worth of costs.
Disney's cost control is what Michael Nathanson, senior managing director of MoffettNathanson, cited as a major reason why The Walt Disney Co. could be back on the rise.
"The company felt that it was out of control financially," Nathanson said on CNBC's Market Alert. "They were spending on content, there was no return on invested capital. And it felt like for the first time [during the Q4 earnings call,] the company was speaking to a financial framework that the Street wanted to hear ... It feels like Disney is back to being under control and they can focus on growing again."
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Nathanson was also asked by CNBC about the difference between Disney and Warner Bros. Discovery WBD which, unlike Disney, saw its stock fall over the last few days. He explained that the mix of products that each company offers is really the driver for Disney.
"35% or so WBD's EBITDA comes from linear networks, 35% of Disney's EBITDA comes from theme parks," Nathanson said.
Linear networks have continued to struggle as more consumers continue to cord cut, shifting to direct-to-consumers services as well. Nathanson said that Disney is more equipped to take on the challenge presented by cord-cutting.
"The problem that WBD has is just the overexposure to linear, and they don't have enough offsetting assets to slow that decline," Nathanson said. "For Disney, linear networks are such a small piece of the company's pie that if parks can turn and you get an improvement of profitability in streaming, that can offset the linear fall."
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On CNBC's Power Lunch, Freedom Capital Markets chief global strategist Jay Woods also mentioned his belief that Disney stock will continue to rise. He just believes that it won't rise up very quickly.
"Is there more upside? Oh, there is more upside. Will it get there quickly? No," Woods said.
Woods pointed out the drop of Disney stock since 2021 as a reason that it'll need some time to return back to form, but expects that value could return to around $92 to $95 per share in the short term, which is about what the company's stock value was in May.
He also cited the return of Iger to the helm at Disney as a key reason for Disney's recalibration.
"The leadership is there," Woods said. "Mr. Iger did not come in to just go sideways for a while. It's starting to turn up and I think today is the catalyst."
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