For years, Disney has poured billions of dollars into building Disney+ to compete with streaming giants like Netflix and Amazon Prime Video. But one Wall Street analyst believes that strategy may actually be holding the company back.

According to a new report from Wells Fargo, Disney could unlock as much as 40% upside in its stock price by making a dramatic strategic shift: stepping away from the streaming wars and returning to what it has historically done better than almost anyone else, producing world-class content.

The idea would represent one of the biggest strategic pivots in Disney’s modern history, but Wells Fargo argues investors could ultimately reward the move.

Why Wells Fargo Thinks Disney Should Exit Streaming

Wells Fargo analyst Steven Cahall said Disney’s competitive advantage has never been owning the platform where people watch content.

Instead, it has always been creating the franchises that audiences can’t live without.

From Marvel and Star Wars to Pixar, Disney Animation, ESPN and its vast catalog of classic films, the company’s intellectual property portfolio remains one of the strongest in entertainment.

Cahall believes that value continues to grow while Disney’s streaming business faces mounting pressure.

“Disney is not set up to compete with Netflix or YouTube on volume,” Cahall wrote in a note to clients.

Rather than trying to match competitors’ relentless pace of new programming, Wells Fargo argues Disney should focus on maximizing the value of its content library by licensing it across multiple platforms if necessary.

The firm maintains an Overweight rating on Disney shares, although it reduced its price target from $146 to $125. Even after that reduction, the target still implies more than 30% upside from recent trading levels.

The Streaming War Is Becoming More Difficult

When Disney+ launched in 2019, it quickly became one of the fastest-growing streaming services in history.

However, the streaming landscape has become significantly more competitive.

According to industry analytics cited by Wells Fargo, Disney+ trails both Netflix and Amazon Prime Video in paid subscribers. At the same time, competitors continue investing billions into original programming while expanding globally.

Another rapidly growing competitor is YouTube.

The platform has increasingly become a dominant force in home entertainment rather than just mobile video viewing.

According to YouTube CEO Neal Mohan, television viewing surpassed mobile viewing on the platform last year. He also noted that YouTube has ranked as the most-watched streaming service by viewing time for the past two years, citing Nielsen data.

For Disney, that creates a difficult challenge.

Unlike Netflix, which releases a constant stream of original programming, Disney depends heavily on blockbuster franchises that often require years between major releases.

That slower release schedule may make it harder to keep subscribers engaged month after month.

Disney’s Biggest Asset May Be Its Intellectual Property

Rather than measuring Disney solely by its streaming subscriber count, Wells Fargo believes investors should focus on something far more valuable.

Disney owns one of the deepest collections of entertainment intellectual property in the world.

That includes iconic characters, films, television series, sports rights, theme park brands and merchandising opportunities that generate revenue across multiple businesses.

Importantly, intellectual property has become increasingly valuable in the global economy.

According to a recent analysis from the United Nations’ intellectual property agency, investments in intangible assets, including patents, trademarks and copyrighted content, grew at an annual rate of 5.5% between 2020 and 2025. Physical investments, by comparison, expanded just 3.2% annually during the same period.

That trend suggests premium entertainment franchises may continue appreciating in value even as distribution platforms become more crowded.

Could Licensing Content Create More Value?

One of Wells Fargo’s more provocative suggestions is that Disney doesn’t necessarily need to own the platform where viewers watch its content.

Instead, it could potentially generate higher returns by licensing movies and television programming to competing streaming services while concentrating on producing premium entertainment.

Cahall argued that Disney’s other businesses, including its theme parks, theatrical releases and overall brand value, likely would not suffer if its content library appeared on rival streaming platforms.

In fact, broader distribution could introduce Disney’s franchises to even larger audiences while reducing the enormous costs associated with competing directly in the streaming business.

Such a move would represent a sharp departure from Disney’s strategy over the past several years, during which the company pulled much of its content from third-party platforms to support Disney+.

Investors Will Be Watching Disney’s Next Move

Disney remains one of the world’s most recognizable entertainment companies, but investors continue debating how much capital should be devoted to streaming versus the company’s more profitable businesses, including parks, experiences and content creation.

Wells Fargo believes the answer is clear: Disney’s greatest competitive advantage lies in creating intellectual property, not winning the increasingly expensive battle for streaming subscribers.

Whether Disney ultimately embraces that strategy remains uncertain.

But if the company ever decides to focus less on distribution and more on producing the content that has defined its brand for generations, Wells Fargo believes shareholders could be among the biggest winners.