A road map for the next CEO

But it wasn’t quite a fairy tale for investors. Disney shares were trading at around $110 on Tuesday; this was only 17% above the level 10 years ago. Netflix and the S&P 500 increased by 832% and 271%, respectively, during the same period.

Still, there are reasons to hope. Barron’s in December named the stock a top pick for 2026, citing a cheap valuation for a company that controls elite entertainment assets and looks poised for a strong rebound in theme park earnings.

There will also be a new CEO. Iger will step down at the end of 2026, and Disney is expected to announce his successor within the next few weeks. Parks chief Josh D’Amaro and TV president Dana Walden are the leading candidates, The Wall Street Journal reported. Disney did not respond to a request for comment on the CEO’s succession plans.

Whoever gets the job will face a huge task in turning around a lost decade for stocks. Barron’s compiled a to-do list for Iger’s replacement.

1) Accelerate Publishing Growth

This should be the new boss’s priority. Investors “need renewed confidence” [streaming] Revenue growth and profitability are still meaningfully up, MoffettNathanson analyst Robert Fishman writes in a research note. He rates the stock Buy with a $140 price target, implying a 27% upside.

Disney seems to be moving in the right direction. MoffettNathanson forecasts its streaming division’s operating margin will rise from 7% to 11% in the fiscal year ending September.

Chief Financial Officer Hugh Johnston said in a November earnings call that the company plans to reach the double-digit milestone by increasing revenue rather than cutting costs. “As we think beyond 2026 and into the future, we definitely aim to gain margin in chunks and not in fundamentals,” he said.

This goal seems achievable if the 2026 content list (more on this later) is successful. Artificial intelligence should also help: Disney formed a partnership with ChatGPT developer OpenAI in December, which could pave the way for integrating the technology into Disney+ and increasing user engagement.

2) Provide More Box Office Success

Its rivals Netflix and Paramount Skydance, Warner Bros. While they fought for Discovery, Disney chose to sit on the sidelines. This is a smart move considering what Disney already has; Who needs Batman or Harry Potter when you have Spider-Man and Luke Skywalker?

The content slate for the next two years looks strong; Chief among these are the new Toy Story, Star Wars, Avengers, Ice Age and Simpsons movies. The challenge for Iger’s successor will be to maintain his box office momentum.

Last year looks like a good start. Zootopia 2, Lilo & Stitch, and Avatar: Fire and Ash have all grossed more than $1 billion. The new CEO needs to continue to release films that hit the 10-figure mark, acknowledging that moviegoers may experience superhero fatigue (Marvel’s Thunderbolts*, Captain America and The Fantastic Four all failed at the box office in 2025).

The long-term goal should be to create a streaming “flywheel” where Disney can attract more users every time it releases a popular movie or TV series, thus generating more money for new content, Fishman says. The model worked wonders for Netflix, which increased its operating margin to 27%.

3) Shape ESPN

Disney’s most worrying asset over the last decade has been ESPN. The cable sports network has gone from a big money maker to a pain point, hemorrhaging subscribers as the move to streaming accelerates.

Disney can’t reverse the tide, but there are ways to stem the rot. The company finally launched an ESPN streaming service in August, and the question now is whether it can generate enough profit to offset cable losses.

Disney is close to doing just that. The sports segment’s operating income increased by $476 million last year, while the linear networks division’s profits fell by $497 million. Iger said in November that the ESPN streaming launch was “a real success,” but investors will likely remain skeptical until February, when Disney reports earnings for the first quarter of its fiscal year.

The big date on the horizon is February 2027, when ESPN prepares to broadcast the Super Bowl for the first time. In the long term, the new CEO has many options; Selling or canceling ESPN would be like mimicking Comcast’s move to divest its cable assets.

4) Improve the Success of Parks

It’s very simple. Its experiences division, which includes theme parks and cruise lines, has become Disney’s largest source of revenue. It accounted for $10 billion of the company’s $17.6 billion in operating income last year, and analysts expect that figure to rise 22% to $12.2 billion by 2028.

Comcast’s new Orlando park, Epic Universe, may have dampened some of the House of Mouse’s foot traffic, and some analysts worry about an economic crisis that could tighten thrill-seekers’ wallets. The good news is that Disney has lined its pockets by pouring tens of billions of dollars into its theme parks and cruise ships to ensure its attractions remain best-in-class.

“This is the most important business that will add value to the firm and is designed for lasting growth,” says Morningstar analyst Matt Dolgin, adding that investment in experiences will have a “natural upside impact.”

Disney’s last replacement for Iger was a disaster. His successor as CEO, Bob Chapek, served just 21 months as CEO before being unceremoniously ousted in November 2022 following a dismal earnings report.

But analysts think the House of Mouse is in a much better position this time around, with publishing turning a profit and the parks looking strong. Dolgin says the CEO just needs to work on the existing foundation.

Iger’s impending departure may unsettle investors, but it doesn’t need to be a Chapek-style fiasco. If the new CEO can get the fundamentals right, Disney stock looks positioned to rediscover its magic.

Write to George Glover at george.glover@dowjones.com