Bob Iger back at Disney makes Wall Street really, really happy

Welcome to the Bob Iger Clubhouse. That crowd in front? Oh, just Wall Street analysts and investors lining up to kiss the ring.

Following the shocking news on Sunday night that Robert Iger had returned as Disney CEO to replace his own successor to Bob Chapek, shares of the company (DIS) jumped 10%. Don't let the park gates bump into you on the way out, Chapek.

Iger's resurrection was enough for research firm Moffett Nathanson to declare the "Magic Is Back". Stock analysts upgraded DIS stock to "outperform" or a buy, with a new price target of $120 (+$20 from its previous PT of $100). In its own initial reaction, Wells Fargo reiterated its earlier price target of $125 and its "Buy" rating.

"We commend the Disney Board of Directors for the courage to make this change," Moffett Nathanson wrote.

While Wells Fargo was the first to recommend Disney as one of its "signature picks," Moffett Nathanson hasn't sold the stock since May 2020. He's increasingly wary of the strategy of streaming from Chapek, saying the former parks guru "became married to a streaming strategy that didn't make sense given today's reality. The subscriber targets were 'unrealistic', have said Michael Nathanson and his band.

The "poor decision" to shift Disney+ "from Disney-themed family and branded content to general entertainment fare" further impacted streaming's potential ROI. Nathanson wants Disney+ to once again focus on superfans (and their higher RPU or revenue per user) and not chasing the highest possible subscriber count. At Wells Fargo, Steven Cahall and his team echoed what Iger's reappointment means for content — and for investor confidence, calling Iger "a stable leader in uncertain times."

Examples of Disney+ going mainstream over the past two and a half years include the move of ABC's "Dancing With the Stars" to the streamer and the introduction of adult-themed Marvel shows, like " Daredevil", "Luke Cage", "Jessica Jones", "The Defenders", "The Punisher" and "The Iron Fist", on the main streaming service (instead of, say, Hulu).

Another thing Nathanson didn't like about the Chapek regime was a restructuring in the new division DMED (Disney Media and Entertainment Distribution). They believe the move "damaged the morale of creative leaders" and "slowed down decision-making." Iger allowed more freedom, and his results speak for themselves.

The DMED rework has greatly strengthened Chapek's No. 2, Kareem Daniel; without his Bob, what about Kareem? Probably not fully enjoying his Thanksgiving dinner this week. "DIS isn't getting things done without more changes to come," Wells Fargo widely warned.

Finally, with Chapek out and Iger back, ESPN could face some serious cost cuts, Moffett Nathanson warned. This means being much more frugal with expensive sports rights, which are already out of control, and probably moving away from some non-essential properties altogether.

“We thank Bob Chapek for his service to Disney throughout his long career, including guiding the company through the unprecedented challenges of the pandemic,” said the chair of the board of directors. Disney administration Susan Arnold in a statement last night. "The Board of Directors has concluded that as Disney embarks on an increasingly complex period of industry transformation, Bob Iger is uniquely positioned to lead the company through this pivotal time."

“I am extremely optimistic about the future of this great company and delighted that the board has asked me to return as CEO,” said Iger, who oversaw Disney from 2005 to 2020. "Disney and its incomparable brands and franchises hold a special place in the hearts of so many people around the world – most especially in the hearts of our employees, whose dedication to this company and its mission is inspiring. I am deeply honored to be asked to once again lead this remarkable team, with a clear mission focused on creative excellence to inspire generations through bold, unparalleled storytelling."

Just in time for .

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