Wells Fargo analysts told investors in a note Friday that Walt Disney's (NYSE:DIS) CFO transition "adds another wrinkle to an already complex story."
However, the analysts, who have an Overweight rating and a $147 price target on DIS shares, added that it could "present a deck-clearing" opportunity for DTC margin guidance come September.
"DIS unexpectedly announced that long-time CFO Christine McCarthy is stepping down for family medical leave," the analysts explain. "McCarthy has been CFO for 8 years and is regarded as a close confidant of Bob Iger, a straight shooter with the sellside/buyside and a strong operator for the upcoming focus on DTC margin improvement. Her interim successor is DPEP CFO Kevin Lansberry, who is not yet well known by Wall Street. DIS will run a CFO search with McCarthy advising."
Disney is Wells Fargo's favorite long-term idea, but the analysts acknowledge that it "won't come easy."
"DIS is an above-average opportunity to our $147 price target, and it has above-average risk (NFLX is far more straightforward story but with less alpha, by comparison)," they added.
"The CFO transition adds yet another wrinkle. It will be followed by a CEO transition within another 1-2 years, while ESPN and DTC present discrete operational challenges. We think it's an opportunity for this kind of upside on such a large-cap stock, but no doubt it will take time for the pieces to come together."