Disney's sports network ESPN, hit by subscriber declines, will benefit from being digitally distributed that will unlock the company's stock, RBC Capital Markets said.
Media analyst Steve Cahall put a $130 price target for this year on shares of Disney, nearly 20 percent higher than Wednesday's premarket price of $109.
"What we think is really getting better with ESPN is these new virtual cable distribution platforms," Cahall told CNBC's "Squawk Box" on Wednesday. "Hulu is set to launch soon, DirectTV now recently launched, and [Disney CEO] Bob Iger last night indicated that they're going to be on Google as well as some others."
Google has not confirmed anything yet, but is widely expected to launch YouTube-affiliated live TV.
In an interview with CNBC on Tuesday, Iger said there was "way too much pessimism" around ESPN's slumping subscriber growth. He said Disney's strategy is to launch the sports network with every new digital service.
"[Digital distribution] helps stabilize that base, it supports their traditional affiliate fees, so that's what unlocks the stock," said Cahall.
Disney's recent investment in media streaming giant BAMTech will also strongly position the company and ESPN in the years to come, Cahall contended.
"BAMTech has the leading technology for concurrent streaming. And so if you think of how we might be watching live sports five or 10 years from now, chances are it will be very digital," the analyst said.
"So whether or not it owns the sports right[s], whether or not it owns the platform that we're watching it on may be less important because it will be owning the production of actually getting that in front of us via BAMTech," he continued.
Disney's leadership roadblock may also need a longer term solution, Macquarie media analyst Tim Nollen told CNBC's "Worldwide Exchange" on Wednesday.
Though Iger is set to retire soon, the company has not yet found a successor.
"Investors have clearly been very happy with Bob Iger's performance as CEO, and I think this comes as no surprise, really," Nollen said. "He was due to retire in about 16 months, and I think that's too short a time frame to have somebody step into the role, whether internal or external."
But that's not a bad thing for the short term, Nollen said. "I think people will take it well knowing that he will likely be there for another two years, at least," he said.
Many names are in the mix, including Facebook COO Sheryl Sandberg. Nollen said his clients' opinions of her taking the helm were mixed.
"On the one hand, having somebody who clearly comes from a digital world might be a very interesting and positive development for a company whose, in many people's opinion, largest issue is the digital distribution of its content," Nollen said.
"On the other hand, Disney is a very broad, diversified company. Digital media is clearly one important aspect of it, but there are lots of others when it comes to parks and consumer merchandise and film and others, so is she qualified to do that is another question," he added.