Comcast Stock Soars On Split News, Does Disney Need To Make A Similar Move?

Media company Comcast Corporation (NASDAQ: CMCSA ) saw shares up around 5% Monday after announcing the company will split into two units, with one focused on broadband and wireless and the other on media and entertainment.

The move follows similar activity in the media sector that Walt Disney Co (NYSE: DIS ) may not be able to ignore. • Where are CMCSA shares going? Comcast Stock Pops Comcast announced its plans to spin off the NBCUniversal and Sky brands as part of a new company apart from its namesake broadband, cable and wireless businesses.

The new company will include assets such as Universal Pictures, NBC, Telemundo, NBC News, Peacock, Bravo, Universal theme parks and Sky.

The move follows a previous spinoff of some cable assets, such as CNBC and MSNBC, into Versant Media Group (NASDAQ: VSNT ).

Comcast said the move will help the company focus on the units separately, but ruled out that the move was being done for M&A activity.

Investors couldn’t help but think of how the spinoff helps the NBCUniversal segment look similar to Disney and provide access to theme parks, broadcast, cable TV and streaming.

The move also follows other M&A activity in the space.

Paramount Skydance (NASDAQ: PSKY ) is working through a high-profile acquisition of Warner Bros.

Discovery (NASDAQ: WBD ) that will create a giant in the streaming, TV and movie sectors.

Read Also: Toy Story Breaks Records, Star Wars Struggles: What Happens To Disney Stock? Will Disney Make a Move? While Netflix tried to acquire Warner Bros.

Discovery, media giant Disney has been relatively quiet in the M&A space despite recent moves by peers.

This comes with Disney stock, one of the top decliners of the named companies.

Here are the year-to-date and one-year returns: Comcast: YTD -11.6%, 1-Year -26.8% Disney: YTD -11.8%, 1-Year -20.4% Paramount: YTD -26.1%, 1-Year -17% Warner Bros.: YTD -5%, 1-Year +136.3% Disney stock has underperformed some of its peers and might need to make a major move for investors to show excitement as the media sector goes through M&A activity to combine cable assets and streaming assets.

For Disney, splitting up its business lines might not make sense, with the potential for three units such as Experiences (theme parks, cruises, consumer products), ESPN/Sports and Disney media (Disney+, Hulu, Disney cable channels, ABC).

These units all complement each other and could be viewed as part of Disney’s strength, with recent ramblings of a potential ESPN spinoff in recent years, the one move that might make sense.

Without a split of the business lines as Comcast did, Disney could look to acquire media assets instead of a split.

Disney’s failure to make a big move in the sector could see the stock underloved and forgotten about by investors as shareholders look to growth by acquisition and M&A activity.

Read Also: Disney And Apple Almost Merged, Here's Why The Deal Didn't Work Photo by Daniel J.

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