Disney just announced its new CEO. Here’s what it means for investors
Disney announced Tuesday that Josh D’Amaro would be getting the keys to the castle. Wall Street is both pleased and unsurprised by the decision to pick the leader of its experiences business, which houses Disney’s parks and cruises, to succeed Bob Iger as CEO beginning in mid-March. The 54-year-old has worked at Disney for nearly three decades. “We are positive on the potential for Mr. D’Amaro,” Guggenheim Michael Morris wrote in a note to clients. Shares popped more than 1% in premarket trading on Tuesday immediately following Disney’s morning announcement, but later fell 1.6% in the session. Disney’s stock is coming off a drop of more than 7% in Monday’s session on the back of earnings and amid some unease about what the transition would bring. DIS 1D mountain Disney, 1-day The question of who would replace Iger has been a closely followed succession story. The legendary executive came out of a short-lived retirement in November 2022 to replace his hand-picked successor, Bob Chapek. Media reports ahead of Tuesday’s announcement asserted that D’Amaro would win the top job. He beat out Dana Walden, co-chairman of Disney Entertainment, after a strong showing leading the experiences unit. The division crossed the $10 billion quarterly revenue mark for the first time in the fiscal first quarter and helped the company outpace analyst estimates. What’s weighing on the stock Keybanc analyst Brandon Nispel said the stock’s slide is more about concerns over the company’s near-term guidance rather than the D’Amaro announcement, which he described as widely expected. Disney warned that visits from international tourists to its domestic theme parks has been weak and could remain so. The experiences division is a key part of Disney’s consolidated earnings, Bank of America analyst Jessica Reif Ehrlich said. For this reason, D’Amaro taking the job should go over well with stakeholders, she said. “We believe this announcement will be well received by the investment community,” Ehrlich wrote in a Monday note. D’Amaro path to the top job at Disney is similar to Chapek, who also headed the division. But the board seems to have gone out of its way to “not repeat the same mistake,” said Daiwa analyst Jonathan Kees. “The board got to know what Josh’s strategy and vision will be, as well as organizational plans,” Kees told CNBC. “They likely also questioned and tested him on making sure that he has the strategic insight and creative ability to preside and grow the entertainment segment.” However, Guggenheim’s Morris warned that any idea of D’Amaro having an “easier set up” is likely an “overly optimistic take.” Still, Morris expects the incoming CEO can “intensify strategic focus on the company’s unique brands and assets yielding a more robust content slate and incremental consumer touchpoints.” An ‘overhang’ Iger told investors on Monday that the California-based company has executed on its turnaround plan over the past three years and has built up momentum. Disney stock tells a different story. It has tumbled more than 10% in 2026. Shares of Disney have fallen about 42% over the last half decade, while the S & P 500 has climbed 81%. Wolfe analyst Peter Supino said D’Amaro will have to find a solution for Disney’s direct-to-consumer strategy. D’Amaro could focus on core intellectual property rather than scale in streaming, Supino said. Under this type of plan, Disney could sell off streaming platform Hulu, he said. DIS .SPX 5Y mountain Disney vs. the S & P 500, 5-year However, BofA’s Ehrlich said the succession has been an “overhang” on the stock. With D’Amaro’s appointment investors may move past this issue. Many on Wall Street have a similar mindset. The average analyst has a buy rating and a price target suggesting shares can rally more than 27%, according to LSEG. — CNBC’s Lillian Rizzo and Sarah Whitten contributed to this report.
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