Rumors of Apple, Inc. AAPL buying Walt Disney Co. DIS has surfaced on and off, and following the latter's quarterly results an analyst said it's unlikely the tech giant pursues the Mouse House.
What Happened: “Our view continues to be that Apple will not buy Disney, given strategically it would not fit in Apple's ecosystem,” said Wedbush analyst Daniel Ives.
The analyst, however, thinks the Tim Cook-led company could be interested in Disney's ESPN division. “That said, we strongly believe if Iger/Board decided to sell ESPN this would be a highly attractive asset for APPL on sports content front Cook would pursue,” he said.
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Why It's Important: Disney is struggling with an uncertain economic recovery, which has impacted its theme park attendance. The loss of appeal for linear TV and the competitive threat in the streaming business have all weighed down on the company and in turn, its stock price.
The company on Wednesday reported better-than-expected adjusted earnings per share but revenue and Disney+ total subscriptions trailed expectations. The company's ESPN recently announced a sports betting partnership with Penn Entertainment, Inc. PENN.
Needham analysts Laura Martin has more than once raised the possibility of an Apple-Disney combination and concluded both would be better off together.
For Apple, a potential ESPN buy could mean bolstering its sports coverage. In June 2022, the company struck a 10-year partnership with Major League Soccer for streaming all MLS matches worldwide, beginning in 2023.
In premarket trading on Thursday, Disney rose 1.38% to $88.70, and Apple gained 0.25% to $178.64, according to Benzinga Pro data.
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