Disney faces multiple challenges, but is it still a buy?

Disney (DIS) is facing multiple challenges — settling ownership over Hulu, potential asset restructuring, uncertainty over CEO Bob Iger's tenure — leaving many investors cautious on the company's future. Shares of the company are down over 20% from where they were a year ago today, but could it be time to buy back in?

Bank of America Securities Senior U.S. Media and Entertainment Analyst, Jessica Reif Ehrlich, joins Yahoo Finance to discuss her position on the company and what potential investors should pay close attention.

When asked about Bob Iger's performance as CEO Ehrlich responds: "It's a little hard to put a grade on Bob because the entire industry is suffering... you can't blame Bob for the 'ad recession' that's going on of course in the industry, nor the decline in the linear pay-TV universe, some of this stuff... it is what it is, and I think there's a lot of confidence that Bob can do it."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JOSH LIPTON: For more on Disney and a possible investment case, we turn to Jessica Ehrlich, Bank of America Securities senior US media and entertainment analyst, and Yahoo Finance's Alexandra Canal. So Jessica, let me ask you this. The stock is down now about 10% year-to-date. Do you think, Jessica, the risks, the challenges, that Allie just laid out there, is it priced in at these levels?

JESSICA REIF EHRLICH: Yeah. I do think a lot of it's priced in. Allie mentions a lot, but there's even more that she could have mentioned. There were a lot of challenges. They just came out of a battle with Charter, which lasted 11 days. I think the end results was actually a positive for Disney. Their film division has performed extremely poorly after many years, more than a decade of incredible industry leading performance.

They also have, which may tie into some of the linear issues, of [INAUDIBLE] ESPN searching for strategic partners. But I think that Allie got a lot of the things, the issues that have been hounding Disney for the last two years.

ALEXANDRA CANAL: So Jessica, given all of those--

JOSH LIPTON: I'm sorry. Go ahead. Go ahead, Allie.

ALEXANDRA CANAL: No, I was going to say, Jessica, given all of those challenges, what one in particular do you think is dragging down the stock price so much?

JESSICA REIF EHRLICH: Probably-- I don't know. I mean, they also remember the-- they have this-- I don't want to say disagreement. They have the Hulu put coming up. So they have to pay at least $9.2 billion, maybe more, for Comcast's 1/3 stake. I just think it's a combination. India has been problematic.

But as you look forward, there are a lot of things that will change in the year ahead, you know, [AUDIO OUT] '24 for them. So I don't know that it's one thing. It's just been one thing after another.

JOSH LIPTON: And Jessica, Bob Iger, grade his performance for me since his return. What letter would you give him? And it's only supposed to be, you know, a couple of years, right, Jessica? So what are succession plans here as well?

JESSICA REIF EHRLICH: It's because of the secular and cyclical challenges, it's a little hard to put a grade on Bob, because the entire industry is suffering. I mean, there are some self-inflicted issues that may have been caused before. Bob got there whether the film division, you know, like, it needs a lot of tender loving care, which I think is his priority at the moment.

But you can't blame Bob for the ad recession that's going on across the industry, nor the decline in the linear pay TV universe. So some of this stuff is just, you know, it is what it is. And I think there's a lot of confidence that Bob can do it. On the succession issue, I don't even think this is the right time to talk about that, because there's so much to do to kind of get the company into the right place. They've restructured. They're bringing down costs. They're fixing what seems to be fixable. The focus now is on improving the content engine that it was and has been.

But there's a lot of work to be done. They don't even have a CFO, a permanent CFO. So you know, Bob needs these extra two years. That's I think-- and Disney does, too. There's no obvious candidate. But again, I would say there is some optimism as you look out to the year ahead. There are several things that will change for the better.