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Walt Disney Co (DIS) - Get Walt Disney Company Report stock is trading down over 4.5% Wednesday morning after reporting lackluster fiscal third quarter earnings Tuesday, but Evercore analyst Vijay Jayant thinks the quarter will be remembered more for major strategic announcements than for a revenue miss.

"We like the direction the company seems to be taking and think a migration to some DTC distribution could ultimately yield large returns, albeit with some elevated risk," Jayant wrote in a note to clients.

Disney has made some milestone changes "against the backdrop of a rapidly evolving pay-TV landscape and in the face of well-publicized structural challenges at ESPN," Jayant said. Disney announced Tuesday that it would remove its content from streaming service Netflix (NFLX) - Get Netflix, Inc. Report in 2019 to create its own direct-to-consumer streaming product in conjunction with is BAMTech acquisition.

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Jayant rates Disney as "outperform" with a $120 price target, implying an 18% upside for the stock. Disney shares are down about 2% since the start of the year.

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