Disney should quit Disney Plus, says Wall Street analyst
Wells Fargo’s Steven Cahall argues Disney should abandon Disney+ and go back to licensing Marvel, Star Wars, and Pixar to Netflix, a move he estimates could add 40% to the stock. It’s a stunning reversal of a decade of industry gospel. Here’s the case, and the case against it.
For seven years, the entertainment industry has operated on one unshakeable rule: every media giant must own its own streaming service. Now a Wall Street analyst is arguing that Disney should tear that rule up, shut the whole thing down, and go back to selling Marvel, Star Wars, and Pixar to Netflix.
It sounds absurd. The math, unfortunately for Disney, is not. Here’s the argument, and why it’s landing so hard.
What the analyst actually said
The thesis comes from Wells Fargo analyst Steven Cahall, in a research note first reported by The Hollywood Reporter. His pitch is blunt: Disney should abandon the direct-to-consumer streaming business and return to what he calls “its old biz model of producing vs. distributing.”
“We think it could add ~40% to the stock price by de-risking EPS and tightening management’s focus to IP and Experiences,” Cahall wrote. In other words: stop trying to be a distribution platform, go back to being the world’s best content factory and theme-park operator, and let somebody else eat the cost of running the pipes.
He also rejected the core justification for keeping everything exclusive, arguing “we don’t think the box office, Experiences, or brand value would suffer if the library were on a competing global streamer.”
The licensing math is the interesting part
The argument rests on a number that’s genuinely hard to wave away. Cahall points to Sony, which doesn’t run its own major streaming service and instead licenses its films out. By his estimate, Sony pulls in more than $1 billion annually from its pay-one movie deal with Netflix alone.
Then comes the kicker: Disney commands roughly three times Sony’s global box office. Scale that same deal up, and Cahall figures Disney could command close to $4 billion a year for global pay-one rights by itself.
Layer on pay-two windows and Disney’s genuinely unmatched back catalog, a century of animation, plus Marvel, Star Wars, and Pixar, and he estimates the total licensing opportunity could exceed $15 billion annually by fiscal 2028, while adding about 10% to earnings per share.
That’s the pitch: enormous, dependable, low-cost revenue, without spending a fortune fighting Netflix for attention.
Why he thinks the current model is broken
The case against Disney+ isn’t that people don’t like it, they clearly do. Cahall’s argument is that it hasn’t worked for shareholders. Over the past five years, Disney shares have lost nearly half their value while the S&P 500 surged more than 70%. The stock closed at $95.62 ahead of the note.
Cahall pins much of that on streaming’s financial drag. His structural point is the sharper one: Disney simply isn’t built to win a volume war against Netflix and YouTube, which fire out content constantly. Disney makes a smaller number of very expensive, very good things.
That’s a spectacular business model for theaters and theme parks, and an awkward one for a subscription service that needs a steady drip of new stuff to keep people from canceling. As he put it, “it’s an open question whether their release cadence is sufficient to manage churn.”
Important: this is not a “Disney is doomed” call
Here’s the context that most coverage is skipping, and it matters. Wells Fargo did not downgrade Disney or tell investors to bail. The firm maintained its Overweight rating, meaning it’s still bullish on the stock. It did trim its price target from $146 to $125, which is a real haircut, but the underlying message is “this company is undervalued and here’s how to fix it,” not “abandon ship.”
It’s also worth being extremely clear about what this is: one analyst’s provocative argument. It isn’t a leak, it isn’t a rumor, and Disney has announced absolutely nothing of the kind. Cahall is doing what good analysts occasionally do, questioning an assumption the entire industry stopped questioning years ago.
Whether anyone at Disney is listening is a completely separate matter.
The case against it
There are solid reasons Disney would tell Cahall to pound sand, and they’re worth stating fairly. A streaming service isn’t just a revenue line, it’s a direct relationship with the customer, and the data that comes with it. Hand your library to Netflix and you’re a supplier again, with someone else owning the audience, the algorithm, and the ability to raise prices or change terms on you later. That’s a hard bell to un-ring.
There’s also the strategic risk of handing Netflix the one thing it can’t build: a century of beloved family IP. Disney spent billions clawing that content back specifically so a competitor couldn’t anchor its service with it.
And Cahall’s claim that box office and the parks wouldn’t suffer is an assertion, not a proven fact, plenty of Disney executives would argue the flywheel between a kid watching Moana at home and a family booking a trip to see it in a park is exactly the thing you don’t want to lease out.
Meanwhile, Disney’s actually going the other way
The timing here is almost funny. While Cahall makes the case for pulling out of streaming entirely, reporting suggests Disney is exploring strategies that go in nearly the opposite direction: leaning into live-TV-style bundles, putting some content back on rival platforms, and even exploring a free, ad-supported tier of Disney+.
Those aren’t the moves of a company preparing to exit. They’re the moves of a company trying to make streaming work harder, chasing the enormous audience that’s migrated to free ad-supported services. So the strategic debate isn’t really “streaming or not.” It’s what streaming should even be now that the subscription land-grab is over, and whether Disney’s answer is a smaller, smarter service or, as Cahall suggests, no service at all.
CEO Josh D’Amaro heads into next month’s earnings report with that question hanging over him.
Disney’s streaming dilemma: what it comes down to
Cahall’s note is valuable less as a prediction than as a provocation. Nobody seriously expects Disney to switch off Disney+ and mail its hard drives to Netflix. But the fact that a respected analyst can make the argument, with a straight face and a $15 billion spreadsheet, shows how thoroughly the streaming consensus has cracked. A decade ago this thesis would have gotten him laughed off a trading floor.
The deeper tension is one every content owner eventually faces: is it better to own the pipe, or to own the thing everyone wants to put through it? Disney bet on both, and the stock chart suggests the market isn’t convinced.
Whether the answer is exiting, shrinking, or simply getting better at it, the era of “build a streamer at any cost” is clearly, finally over.
Disney spent seven years and untold billions convincing everyone streaming was the future. Now Wall Street is asking for a receipt.
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Article compiled and edited by Derek Gibbs (entertainment editor) and the Clownfish TV newsroom.
Hat Tips:
The Hollywood Reporter (July 13, 2026), which first reported the research note, verified for the core thesis (Wells Fargo analyst Steven Cahall arguing Disney could add roughly 40% to its share price by returning “to its old biz model of producing vs. distributing,” tightening management’s focus to IP and Experiences, his estimate that Sony earns over $1 billion annually from its pay-one Netflix deal while Disney commands three times Sony’s global box office implying nearly $4 billion for global pay-one alone, total licensing revenue potentially reaching $15 billion, and his statement that “we don’t think the box office, Experiences, or brand value would suffer if the library were on a competing global streamer”)
Bloomberg (via Yahoo Finance) and BigGo Finance (July 2026), verified for the financial details (Wells Fargo maintaining an Overweight rating while lowering its price target from $146 to $125, Disney shares closing at $95.62, Disney stock losing nearly half its value over five years while the S&P 500 rose more than 70%, Cahall’s argument that Disney is not structurally set up to compete with high-volume streamers like Netflix and YouTube, his “open question whether their release cadence is sufficient to manage churn” comment, the projected ~10% addition to earnings per share, and the fiscal 2028 timeframe)
Forbes (July 13-14, 2026), verified for the counter-context (reporting that Disney is exploring strategies including live-TV bundles, offering content on rival platforms, and a free ad-supported tier, the pressure on CEO Josh D’Amaro ahead of next month’s third-quarter earnings, and the broader streaming market’s engagement and consumer-cost challenges), and Disney’s 2019 pivot to keeping content exclusive to Disney+ rather than licensing it to third parties